(Reuters) -Black Rock Coffee Bar is targeting a valuation of up to $860.7 million in its New York initial public offering, the cafe chain said on Tuesday, setting the stage for a rare consumer sector listing amid an IPO market buoyed by tech-heavy debuts.
The Scottsdale, Arizona-based company is seeking up to $265 million by offering 14.7 million shares priced between $16 and $18 apiece.
While the new listings market has made a comeback after a brief pause in April, consumer-related IPOs have been
a key miss, with much of the activity coming from sectors with low-tariff exposure.
Black Rock Coffee's flotation will be a crucial test of investor appetite for consumer IPOs, with its peer Dutch Bros having gone public back in 2021.
Founded in 2008, Black Rock Coffee is a founder-owned operator of drive-thru coffee bars, selling hot and iced coffees as well as energy drinks, including Nitro Cold Brew and Caramel Blondie.
While it began as a single coffee stand in Oregon, it has since bulked up with over 150 locations spanning seven states from the Pacific Northwest to Texas.
BEANS AND TARIFFS
The company sources most of its coffee beans from Brazil, Ethiopia, Colombia and Mexico, among other countries.
Inflated costs or lower availability of arabica coffee beans, dairy and other commodities could have an adverse impact on its business, according to its prospectus.
Coffee prices have hit a record high this year, driven by droughts in top producers Brazil and Vietnam and a U.S. move to impose 50% duties on beans imported from Brazil.
Moving forward, the company expects much of the tariff exposure stemming from refrigeration units, espresso machines and coffee beans.
Black Rock Coffee will list on the Nasdaq under the symbol "BRCB". J.P. Morgan, Jefferies, Morgan Stanley and Baird are the lead underwriters for the offering.
(Reporting by Arasu Kannagi Basil and Ateev Bhandari in Bengaluru; Editing by Vijay Kishore)
