Latin American McDonalds Files IPO (MCD, BAC, JPM, MS, C)

The Latin American McDonalds (NYSE: MCD) operator, Arcos Dorados Holdings, has filed for an initial public offering (IPO) in the U.S. of up to $1.08 billion. Arcos Dorados plans to sell 62.5 million shares of McDonalds for $13-$15 a share. An additional 9.4 million shares may be sold as well.

Arcos Dorados' CEO, Woods Staton, will reduce his stake from 76.9% to 75.5%. Also selling shares are private equity funds managed by Gavea Investimentos Ltda, Capital International Private Equity Funds and DLJ South American Partners LLC. Arcos Dorados is being advised on this transaction by Bank of America (NYSE: BAC), JPMorgan Chase (NYSE: JPM), Morgan Stanley (NYSE: MS), Itau Unibanco and Citigroup (NYSE: C).

Arcos Dorados plans to open new locations and remodel the existing restaurants. Currently, Arco Dorados owns 1,292 McDonalds Restaurants in Latin America and oversees 463 franchises.

Using the proceeds from the IPO for renovations and new restaurant endeavors shows confidence in the growth opportunities in Latin America, an area whose population continues to grow.

Arcos Dorados bought McDonald's Latin American operations for $700 million in 2007. According to Bloomberg, "Arcos sales in 2010 totaled $3.02 billion and the company reported earnings before interest, tax, depreciation and amortization of $299 milion." Over the past three years, Arcos Donados has overseen an 18% increase in store locations.