Dive Brief:

• Cooper's Hawk Winery & Restaurants is planning to go public in 2022, Bloomberg reports. The casual dining chain, which includes a wine club and events spaces, is reportedly targeting a valuation of more than $1 billion.
• The concept was founded in 2005 and has since grown to more than 45 locations nationwide. In 2019, it was sold to private equity firm Ares Management for more than $700 million.
• This news comes on the heels of a busy 2021 for restaurant IPOs. For the first time since 2015, at least five restaurant chains went public last year, including Krispy Kreme, Sweetgreen, Dutch Bros, Portillo's and First Watch. Panera Brands and Mod Pizza also announced their intention to go public.

Dive Insight:

Pitchbook analysts expect 2022 to be another active year for IPOs, and if diner demand for eating out remains high and interest rates remain low, the restaurant space could be a major part of that activity. According to Ernst & Young, 2021 featured the highest annual deal volume on the markets ever, with 2,388 companies going public. 

Still, it’s tough to tell at this point if that pent-up demand usurps consumers' comfort levels to dine out, the latter of which could dampen Cooper's Hawk's valuation as an on-premise-focused brand. As the COVID-19 omicron variant proliferates, the percentage of U.S. adults who say they feel comfortable dining out has fallen 9 points since Oct. 30, according to Morning Consult. That said, most consumers, including 59% of baby boomers and 55% of Gen Xers, say they are not eating on premises as much as they would like. If the omicron variant wanes, which it is expected to, that could position Cooper's Hawk favorably.

The concept is also has assets that differentiate it from competitors, which investors could find attractive. Cooper's Hawk invested in technology, for example, to weather the 2020 storm. It has also co-marketed successfully with companies like Ruth's Chris and Bueno Visa, and has added a travel services channel with curated experiences to support its wine club members. The company plans to add a pizza concept next, according to Nation's Restaurant News.

Its wine club, however, is the biggest differentiator and is growing by about 25% a year to roughly 500,000 members. It could also be a head-turner for investors, as wine clubs turn a profit and tend to retain members for 28 months on average, according to Vine Spring.

An IPO could help grow this channel even more and further support Cooper's Hawk's overall expansion plans. The company currently has at least seven new restaurants scheduled to open in the next two years. It could also help bolster recovery efforts and get the company back to its pre-pandemic momentum. According to Restaurant Business, Cooper's Hawk's sales tripled in the five years leading up to 2020.

Notably, by targeting a $1 billion valuation, Cooper's Hawk seeks to raise more than double the amount of Krispy Kreme, Portillo's, Sweetgreen and Dutch Bros., which all went public in 2021 with valuations between $364 million and $500 million.