Carlyle-Backed Madero Said to Seek $1.3 Billion Valuation in IPO

(Bloomberg) -- Madero Industria e Comercio SA, a Brazilian restaurant chain backed by private equity firm Carlyle Group Inc., is seeking to be valued at about 7 billion reais ($1.3 billion) in its initial public offering, according to people familiar with the matter.

The Ponta Grossa, Parana-based company plans to raise about 1.2 billion reais with the share sale, said the people, who asked not to be named as the discussions are private. Some of the existing investors would also sell some of their stake. Madero declined to comment, citing a quiet period.

The restaurant chain was hit hard by Covid-19 lockdowns in Brazil, a global hot spot for the disease. With 238 stores in the nation, Madero saw its net debt soar 258% between December 2019 through last June, the IPO prospectus shows. The plan is to use about half of the share sale proceeds to pay some of its financial contracts, with the rest being used to expand restaurants and for potential acquisitions.

Madero was founded by Luiz Renato Durski Jr., a firebrand businessman who last year took to social media to criticize lockdowns. Junior Durski, as he’s known, currently owns 65% of the company. Carlyle agreed to purchase a minority stake in Madero in 2019 and owns about 28% of the firm, according to the prospectus.

The restaurant chain is hoping to bounce back as Brazil advances vaccinations and lifts Covid-19 restrictions. Sao Paulo, the country’s richest state, has already eased most of its curbs and allowed restaurants to operate with a capacity of up to 80%. Brazil has the second highest virus death toll in the world, but daily infections have gradually dropped to between 30,000 and 40,000 per day.

Madero, which also operates restaurants under the Jeronimo brand, filed for an IPO earlier this month without disclosing offering details. Banks running the deal are BTG Pactual, Bank of America, Bradesco BBI, Itau BBA, UBS-BB and JPMorgan.

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