Stockholders put Noodles, Clovis shares on sale block
Restaurant chain Noodles & Co. Inc. and biopharmaceutical developer Clovis Oncology Inc. announced stock sales in early December, creating future cash wealth estimated in the hundreds of millions of dollars, mostly for shareholders.
Companies and stockholders hold such sales when they think they can get the best prices, said Robert Pyle, a certified financial planner who heads Diversified Asset Management Inc., a wealth-management firm in Boulder. The stock market has gained about 30 percent this year, an indication that the market is getting stronger, he said.
Stockholders and company officers at Broomfield-based Noodles (Nasdaq: NDLS) are expected to sell stock worth $210.3 million sometime this month, according to a federal regulatory filing made Dec. 2. The latest planned stock offering comes after a successful initial public offering raised $100 million in July. The chain of fast-casual restaurants expects to see sales growth of up to 3 percent through the end of the year, according to a separate regulatory filing.
Noodles stock traded at $40.63 per share on Nov. 29, creating the informal value for the latest planned stock sale. No formal price has been set and no specific date has been announced for the new offering.
Of the total 5.175 million shares of Class A stock to be sold, Noodles plans to sell 108,267 shares and stockholders plan to sell 4,391,733. Underwriters are expected to sell an additional 675,000 shares of stock, according to a regulatory filing.
The company also plans to repurchase shares of common stock directly from certain Noodles officers. Noodles will use proceeds from the public offering to fund the repurchase.
The situation at Boulder-based Clovis (Nasdaq: CLVS) is a little different. Clovis purchased Italian biopharmaceutical company EOS S.p.A. for $190 million in stock shares and $10 million in cash, in a deal announced Nov. 20. EOS is developing a drug to treat breast cancer.
Some of the EOS stockholders who received Clovis shares in the sales transaction now want to sell them. The company is offering 2 million shares to the public at $57.50 per share, which would generate about $115 million. All of the shares are being sold by existing stockholders, according to a Clovis statement issued Dec. 3. The company will not receive any of the proceeds.
Both Noodles and Clovis have been stock market darlings since going public. Noodles executives have said they want to grow the franchise to 2,500 restaurants in the next 15 to 20 years. Clovis executives formed a cancer drug research company that has drug candidates in the late stages of development.
Noodles originally planned to sell about 5.8 million shares for $12 to $14 in its initial public offering in July. Priced at $18 on the first day, the shares shot up more than double to $36.75 that day.
The soaring stock price right out of the gate is the latest and greatest in a line of successes for the Colorado-born restaurant company. As of May 28, Noodles & Co. had 343 restaurants – 291 company-owned and 52 franchised locations – across 26 states and the District of Columbia.
Kevin Reddy, Noodles' chief executive, and Keith Kinsey, its chief operating officer, both formerly worked for Chipotle Mexican Grill Inc., and some analysts compared Noodles' successful IPO favorably with that of Chipotle in 2006. Reddy received a $1 million bonus for helping shepherd Noodles through the IPO process, according to SEC documents. Kinsey received $500,000.
Noodles is known for its wide range of noodle and pasta dishes, from its Japanese pan noodles and pesto Cavatappi to Wisconsin macaroni and cheese.
When it comes to reasons for Clovis Oncology's success, look no further than chief executive Patrick Mahaffy. He founded the company with other former executives of Boulder-based Pharmion Corp., which he also co-founded. Pharmion was sold to Celgene Corp. in Summit, New Jersey, for $2.9 billion in 2008.
Clovis was rumored to be for sale in September, after the stock tripled in value over the last year or so. The company raised $130 million in an initial public offering of 10 million shares in the fourth quarter of 2011.
Clovis bought EOS for that company's cancer-treatment drug candidate, named lucitanib. In clinical studies, lucitanib performed well in some breast-cancer studies done on human patients.
In 2012, EOS partnered with French pharmaceutical company Les Laboratories Servier in an agreement that gave the French company the rights to sell lucitanib in Europe and other markets. With Clovis' purchase of EOS, Clovis will collaborate with Servier to develop lucitanib, with Servier responsible for the first 80 million euros of development costs (about $108 million).
With the purchase, Clovis will hold exclusive rights for lucitanib in the United States and Japan. Clovis can receive an additional 350 million euros (about $470 million) through its license agreement with Servier, once certain drug-development and sales milestones are met.
In addition to the breast cancer drug candidate, Clovis Oncology is developing drug candidates to treat lung cancer, ovarian cancer and a gastrointestinal tumor cancer.
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