BBQGuys go easy on the hot sauce

2 minute read

Veggie burgers are cooked over a flame on a grill in Greenwich, Connecticut, U.S., June 26, 2017. REUTERS/Adrees Latif

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NEW YORK, July 20 (Reuters Breakingviews) - BBQGuys want to serve up the metaphorical spatulas and forks for the grill-making initial public offering mini-boom. The firm is merging with special-purpose acquisition company Velocity Acquisition (VELO.O) at an enterprise value of $839 million. It’s profitable, but it’s also peripheral – and its valuation reflects that.

The e-commerce outfit, backed by former football star Peyton Manning and other family members, sells grills and smokers from brands like Weber and Traeger, both of which filed for IPOs this month. Demand for grills has soared during the Covid-19 pandemic, so BBQGuys’ revenue increased 68% in 2020. But it’s one of many places where backyard chefs can find such products. The company’s not just a bet on grilling habits, but on grilling connoisseurship, which makes it somewhat more speculative.

BBQGuys are going easy on the special sauce with their valuation. At 2 times next year’s estimated sales it’s cheaper than suppliers may fetch read more . Then again, it also lacks the additional simultaneous investment from big-name firms like BlackRock (BLK.N) and Fidelity common to many other SPAC deals. That makes it look at best like a palatable side-dish. (By Amanda Gomez)

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Editing by John Foley and Oliver Taslic

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