Shares of Arcos Dorados Holdings Inc, a large South American franchisee of fast-food chain McDonald's Corp, rose 27 percent in their stock market debut as investors clamored for exposure to the famous brand in a region with booming consumer spending.
The shares were up $4.60 at $21.60 in Thursday morning trading on the New York Stock Exchange after an upsized IPO that priced above the proposed range and raised $1.25 billion. Argentina-based Arcos Dorados, whose name means "golden arches" in Spanish, is the largest McDonald's franchisee by sales and number of restaurants, taking in about 5 percent of all money spent at the hamburger chain around the world in 2010, according to a filing with US regulators.
Arcos Dorados has been setting up to benefit from the growing modernisation in Latin America as more and more people adopt fast-paced lifestyles that rely on the convenience of fast food. "It's a company that obviously has great brand recognition and it's in a wonderful part of the world," said Edward Jones analyst Jack Russo.
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