Proceeds from securities would be used for acquisitions in restaurant, hospitality industries, SEC paperwork shows
First, Potbelly Corp.; now, Chicago restaurateur Larry Levy.
The co-founder and chairman of Levy Restaurants, whose holdings include Spiaggia, Fulton’s on the River and Jake Melnick’s, has founded Chicago-based Levy Acquisition Corp. and filed papers with federal regulators to sell more than $150 million in securities in an initial public offering.
Levy Acquisition plans to use the proceeds to make acquisitions in the restaurant and hospitality industries, though it didn’t rule out other sectors.
Specifically, Levy plans to sell 15 million units for $10 each. It has applied to list its units, common stock and warrants on Nasdaq under the symbols LEVYU, LEVY and LEVYW.
Each Levy unit consists of one share of common stock and one-half of a warrant. Each warrant gives the owner the chance to purchase one common share at $11.50 a share.
“We believe our management team is well positioned to take advantage of investment opportunities in the restaurant and hospitality sectors and that our contacts in these sectors will allow us to generate attractive acquisition opportunities,” the Securities and Exchange Commission filing said.
Levy is chairman and chief executive of Levy Acquisition. He co-founded Levy Restaurants in 1978 and grew it from a Chicago delicatessen into an international food service company that generates more than $1 billion in revenue, the filing said. Levy Restaurants has 25,000 workers and also provides food services to about 100 sports teams and other entertainment venues, including Wrigley Field.
Levy could not be reached for comment Monday.
The units could begin trading shortly, and the common stock and warrants making up the units are expected to begin trading in about six weeks, according to the filing dated Friday. Shares of Potbelly Corp., a Chicago-based sandwich chain, began trading Friday and more than doubled in their market debut.
Levy Acquisition is what’s known as a blank-check company, which means it has no specific business plan or it has indicated its business plan is to engage in a merger or acquisition with an unidentified company or companies.
“We have not identified any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target,” according to the filing.
Directors of Levy Acquisition include Craig Duchossois, CEO of Duchossois Group Inc.; Marc Simon, CEO of Halo Branded Solutions Inc., a private company that distributes promotional products; and Howard Bernick, former CEO of Alberto-Culver Co.
After the offering, officers and directors who now own 100 percent of the company will own 20 percent of it.
Levy and his management team have a track record of identifying undervalued businesses, improving their operations and building on them through other acquisitions, the SEC filing said. Besides favoring investments in the restaurant and hospitality business, Levy Acquisition will also look for companies with stable profits and the potential for strong cash flow. It said acquisition targets will have an “established management team” that it intends “to complement, not replace.”
Beginning in January 2014, Levy will become chairman emeritus of Levy Restaurants and a consultant to Compass.
The Levy Acquisition filing includes about 25 pages of potential risks of investing in Levy Acquisition. They include the fact that Larry Levy is a party to certain agreements that will limit his ability to solicit or hire employees of Levy Restaurants. That, in turn, could make Levy Acquisition a less-attractive buyer to certain companies interested in selling.