April 9, 2014 / 6:35 PM / 6 years ago

El Pollo Loco picks Jefferies, Morgan Stanley for IPO: sources

(Reuters) - El Pollo Loco Inc has selected investment banks Jefferies Group LLC and Morgan Stanley to lead an initial public offering of the private equity-owned fast-food chicken chain later this year, according to people familiar with the matter.

The move makes El Pollo Loco the latest among several private equity-backed restaurant chains hoping to go public this year amid strong demand by stock market investors hungry for exposure to the fast-growing casual dining sector.

The sources asked not to be identified because El Pollo Loco’s IPO plans are confidential. Representatives for the banks, El Pollo Loco, and its private equity owners, Trimaran Capital Partners Inc and Freeman Spogli & Co, either declined to comment or did not respond to requests for comment.

El Pollo Loco operates more than 400 company-owned and franchised restaurants in Arizona, California, Nevada, Texas and Utah. The Costa Mesa, California-based company recorded revenues of about $307 million in the 12 months ending June 26, 2013, according to Moody’s Investors Service Inc.

Mediterranean-style restaurant chain Zoe’s Kitchen Inc is about to demonstrate investor appetite for casual dining chains. The Birmingham, Alabama-based company, backed by private equity firm Brentwood Associates, revised its IPO price range upwards this week.

Trailing Zoe’s Kitchen is pizza chain Papa Murphy’s Holdings Inc, which is backed by buyout firm Lee Equity Partners LLC. It filed for an IPO last month.

In addition to El Pollo Loco, Jefferies is also leading the IPOs of Zoe’s Kitchen and Papa Murphy’s.

Trimaran Capital Partners took over El Pollo Loco from American Securities LLC for $415 million in 2005. El Pollo Loco then filed for an IPO in 2006 but withdrew the registration later that year, only to receive a private $45 million investment from Freeman Spogli in 2007.

Reporting by Olivia Oran and Greg Roumeliotis in New York; Editing by Jonathan Oatis

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