The big burrito: The IPO of Guzman y Gomez

It’s been an exciting time for our IB Partners ASX, Gilbert + Tobin, and Perennial Partners who all played pivotal roles in the recent, HUGELY SUCCESSFUL, Guzman y Gomez (GYG) IPO – Australia’s hottest IPO in three years. The positive result outcome is a testament to the underscores that such outcomes are possible for Australian companies that have strong fundamentals the market is on an upward trajectory.

Guzman y Gomez Limited’s recent IPO and ASX listing is more than just a milestone
for the company; it’s a testament to the thriving potential of Australian founder-led
start-ups.

Founded in 2006 as a Mexican eatery in Newtown, Sydney, what started as a single
restaurant soon captured hearts and palates nationwide, transforming into one of
Australia’s fastest growing QSR businesses.

Over the years, Guzman y Gomez expanded its footprint across Australia (and into
Singapore, Japan and the United States), and by the time of its IPO, the company
had scaled its operations to over 200 restaurants and garnered substantial brand
equity.

While the size of the IPO itself was relatively small, with an offer price of A$22 per
share and proceeds raised from the issue of new shares being A$200 million, the
company was able to achieve an impressive enterprise value of A$1.953 billion, with
an EV to FY25 forecast pro forma EBITDA of 32.6x. By close of trading on day 1 of
listing, Guzman y Gomez had a market capitalisation of approximately A$3 billion.
Gilbert + Tobin’s market-leading capital markets practice guided Guzman y Gomez
through a A$135 million pre-IPO funding round that was conducted shortly before the
IPO. This pre-IPO round allowed the company to test demand from institutional
investors and get an indication on valuation. This strategy was successful, with
demand for pre-IPO stock significantly more than what could be accommodated.

Guzman y Gomez was able to run its IPO from start to finish in under 3 months. This speed of execution was only possible because the preparatory work done by the company with its advisers allowed it to seize the best window for a run at the boards. This meant having a well-developed legal and finance function, dedicated internal resources available to do the heavy lifting on the prospectus drafting, and already having the requisite audited and reviewed financial accounts, and an FY25 forecast which had been developed prior to kicking off the formal IPO due diligence process.

The clear and supportable growth pipeline articulated in the prospectus was compelling to investors, with the pre-IPO investors doubling down on their initial investment by cornerstoning the entire IPO fundraising. 

This success story underscores a critical message for aspiring Australian start-ups: significant achievements and favourable valuations are well within reach without the need to undertake large issuances of new shares or seek listing on overseas markets. Australian companies, no matter how modest their beginnings, can aspire to great heights and secure successful listings on the ASX. The trajectory of Guzman y Gomez serves as a powerful example of local potential realised on a national stage.

For founders and venture capitalists looking to navigate the IPO landscape, having a team of professional advisers with the right expertise and experience is an invaluable asset. Gilbert + Tobin’s team brings extensive experience and a proven track record in guiding Australian companies through the IPO process, ensuring they achieve

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