Pie Face looking to raise $10m for ASX listing

Food franchisor Pie Face Holdings is looking to raise up to $10 million in a pre IPO investment, with plans to float the company for more than $100 million by 2012.

Founded in 2003 by Wayne Homschek and Betty Fong, Pie Face specialises in gourmet pies, sausages rolls, coffee and other baked goods. The bakery chain has grown to nearly 50 stores, 37 of which are franchised-owned.

The company’s revenue of $13.1 million, in the six months to December 31, 2010, was up from $11.7 million for the year to June 30, 2010, while same store sales grew by about 30% over 2010.

The company has appointed Macquarie Group and CBA Equities as joint leaders to assist the company in its plan to list on the Australian Securities Exchange.

By 2018, Homschek wants Pie Face to be the first quick service restaurant chain to be valued at $1 billion listed on the ASX.

In order for that to happen, the company is looking to raise $10 million in a pre IPO placement to help fund the next stage of growth and re-finance its senior debt.

The pre IPO is expected to be completed by June 30, 2011. Homscheck says this is the first time the company has “gone outside” for funding.

“We produce all of our own product, so food production is a big part of the business. We need to upscale the facilities quite a bit, refinance a loan and open more company stores,” he says.

Pie Face is looking to roll out a national network, looking to add 50 stores a year over the next two to three years.

Homscheck says the company probably wouldn’t proceed with the IPO in 2012 if it couldn’t get at least $100 million valuation on the business.

“The determining factor will be marked conditions and how far advanced we are in our business plan,” he says.

According to Homschek, floating the company has always been a key goal because it’s a “good discipline that requires [companies] to think and act a certain way”.

“From the day we started, we had a vision for it – to build from having many stores, a global brand and successful franchisees and eventually a public listing,” he says.

“I need to reiterate that the listing is not imminent and it will happen no sooner than 2012. So for the time being, it’s business as usual,” he says.

“In the short-term, we’ll be raising a bit of capital for the IPO but we need to be careful because it’s a working progress.”

Listed players in the food retail sector include Retail Food Group, which owns Donut King and Michel’s Patisserie, and Domino’s Pizza Enterprises.