Pancake House starts roadshow for initial offering

Pancake House, the chain of casual dining restaurants owned primarily by the Lorenzo family, kicks off today the roadshow for its initial public offering (IPO) set on Dec. 1.

Already considered as a local institution in the table-service, casual dining format, Pancake House plans to raise as much as P137.9 million in the public float that will make available to the public 34 percent of the company’s total shares.

The proceeds of the IPO will be channeled mainly for the expansion of its nationwide chain, adding nine more company-owned outlets to its present network of 23.

Pancake House is part of the Lorenzo clan’s twin IPO for this year alone with agribusiness-oriented plastics manufacturing firm Macondray Plastics Inc. also expected to start its offering next month.

The IPO will be lead managed and underwritten by Amalgamated Investment Bancorporation, at a price range of P1.46 to P2.15 per share.

The offer price represents a price-earnings multiple of 7.83x to 11.53x 2001 income, projected to hit P35.2 million. In the six months from March to Aug. this year, Pancake House earned P1.776 million although revenue growth is expected to increase tremendously next year with the expansion binge.

The rest of the proceeds, meanwhile, will be used for the construction and completion of its commissary facilities by next year, the renovation of three existing outlets and the development and implementation of the company’s e-commerce strategy.

Pancake House has an almost equal number of company-owned and franchises stores, at 11 and 12, respectively. Although the IPO proceeds will be plowed into company-owned outlets, the firm is also actively seeking prospective investors for franchising. – Conrado Diaz Jr.