Kiso Restaurant Chain Targets $89M IPO Valuation

Asian restaurant chain Kiso is preparing for its initial public offering on the Tel Aviv Stock Exchange, targeting a valuation of approximately 330 million shekels (around $89 million USD). This move follows a period of adjustments from its initial valuation aspirations, signaling a pragmatic approach in the current market climate.

The company, co-founded by Rotem Tachan and Noam Gabai, aims to raise approximately 20 million shekels through the share issuance. Underwriters for the offering include Discount Underwriting. In addition to the primary share sale, Kiso plans to offer investors options to purchase shares, exercisable at a premium to the IPO price, which effectively lowers the company's valuation when fully accounted for.

Existing shareholders, including the founders Rotem Tachan and Noam Gabai, will divest shares valued at roughly 43 million shekels. Post-offering, Tachan and Gabai are expected to retain a significant stake, estimated at 47% of the company's equity, worth approximately 165 million shekels. Key executives, such as CEO Adi Engelder and COO, who each hold about 5% of the company, will also see their holdings valued at around 16.5 million shekels.

Established in 2011, Kiso has carved a niche in the competitive food service sector by operating eight restaurants focused on diverse Asian cuisines, including Chinese, Thai, Japanese, Indian, and Vietnamese. The chain has a strong presence in the Gush Dan, Sharon, and Shfela regions of Israel. Kiso is actively expanding its footprint, with three new locations in development, including a unique venture in a preserved building in central Tel Aviv and additional sites in Haifa and Rehovot.

Financial disclosures reveal that approximately 41% of Kiso's revenue last year was generated through delivery services, highlighting the growing importance of off-premise dining. The company reported average revenue per diner of around 150 shekels for the past year. For the first half of the current year, Kiso posted revenues of approximately 182.5 million shekels, a substantial 26% increase year-over-year. This top-line growth was complemented by an operating profit of 24 million shekels, up 22% from the same period in the prior year, driven by increasing restaurant occupancy and operational efficiencies.

Looking ahead, Kiso projects robust growth, forecasting revenues between 370-380 million shekels by the end of 2026, representing an estimated annual growth rate of 22.5% from 2025 levels. The company anticipates adjusted EBITDA to reach between 47-55 million shekels in 2026, mirroring the projected growth trajectory. This expansion plan and financial outlook position Kiso as a notable player in Israel's dynamic culinary market, with its public offering set to provide capital for further development and expansion.