The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Sebastian Pellejero

NEW YORK, July 9 (Reuters Breakingviews) - A franchise model and 160% sales growth since 2020 make Jersey Mike's an appetizing investment. The Blackstone-backed chain's boss, Charlie Morrison, also led Wingstop to stock-market success. At a mooted $11 bln valuation, however, the meaty 34 times EBITDA is hard to digest.

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CONTEXT NEWS

Jersey Mike’s Subs, the sandwich chain backed by private equity firm Blackstone, on July 3 unveiled plans for an initial public offering with a targeted valuation, according to the Financial Times, of about $10 billion to $12 billion.

Blackstone agreed in November 2024 to buy a majority stake in Jersey Mike's, in a deal that valued the company at $8 billion, including debt, according to multiple media reports citing unnamed sources at the time.

Morgan Stanley, Jefferies and JPMorgan are the global coordinators and joint bookrunning managers for the IPO, with Barclays and Guggenheim Securities listed as the leading co-managers. Another 21 financial institutions, including BofA and Baird, are also involved, according to the prospectus.