OTG EXP Inc. is seeking to raise as much as $585 million through an initial public offering, according to a filing with the U.S. Securities and Exchange Commission.
OTG plans to sell 32.5 million shares of Class A common stock for $16 to $18 per share.
An overallotment option of an additional 4,875,000 shares is available to the IPO’s underwriters, according to the document. So if every possible share sold at the highest value, the IPO would raise $672.75 million.
Underwriting the offering are Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, Barclays Capital Inc., BMO Capital Markets Corp., KeyBanc Capital Markets Inc., Fifth Third Securities Inc., Regions Securities LLC and Maxim Group LLC.
Following the IPO, OTG EXP will be a holding company that will have an equity interest in OTG Management LLC, which is operated by Rick Blatstein, founder, chairman and CEO. Blatstein will control about 92 percent of the voting interest in the company following the IPO, according to the SEC filing. Proceeds will be used largely to pay down debt.
OTG posted a net loss of $46.7 million on net sales of $273.6 million in fiscal 2014 and through the first three quarters of fiscal 2015 had lost $116.1 million on $285.3 million in sales. The company has shown a 23 percent compound annual growth rate in sales over the past three years.
OTG is emphasizing its business model and potential for growth as keys to success. The company’s locations are locally driven, chef-operated proprietary concepts, which the company says allows it to avoid franchising fees, get lower terminal rents and achieve better efficiencies with its technology use.
The company’s growth strategies primarily involve expansion into new airports and terminals, increasing sales in existing operations and using the company’s technology to create new revenue streams. OTG was at the forefront of the airport concessions industry in ordering technology at restaurants through the use of iPad ordering at many of its locations. The company calls its efforts to combine world-class hospitality, award-winning cuisine, innovative design and state-of-the-art technology the “OTG Experience.”
OTG was founded in 1996 with a single concept at Philadelphia International (PHL). The company currently has more than 220 locations in 10 airports, including John F. Kennedy International (JFK), Newark Liberty International (EWR), Minneapolis-St. Paul International (MSP) and Toronto Pearson International (YYZ).
The company has applied to list its Class A common stock on the NASDAQ Global Select Market under the symbol “OTG.”
