(Reuters) – Shares of Dutch Bros Inc, which is backed by private equity firm TSG, rose over 41% in their stock market debut on Wednesday, valuing the coffee chain at $5.36 billion.
Shares opened at $32.5, compared to the initial public offering price of $23 per share.
Dutch Bros was founded in 1992 by brothers Dane and Travis Boersma, third-generation dairy farmers who were forced to leave the business due to industry-wide disruption. They started experimenting with coffee beans and began selling espresso from a pushcart by the railroad tracks in Grants Pass, Oregon, which is still the company’s headquarters.
The coffee chain sold 21.1 million shares in its IPO on Tuesday, raising about $484 million. The IPO was priced above Dutch Bros’ earlier targeted price range of $18 per share to $20 per share.
Travis Boersma holds majority voting power in the company after the IPO. TSG, which bought a minority stake in the company in 2018 for an undisclosed sum, holds about 22.2% of Dutch Bros.
The company bought its first drive-thru in 1994 and has expanded to 470 drive-thru locations across 11 states. Dutch Bros and its franchise partners employ more than 16,500 people.
For the six months ended June 30, the company’s franchising and other revenue rose 13% to $47.1 million compared to a year earlier, when it saw a decline in same-shop sales due to the COVID-19 pandemic and the West Coast wildfires.
BofA Securities, J.P. Morgan and Jefferies were the offering’s lead underwriters.
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