DineEquity, Inc. Announces The Sale Of 65 Applebee’s Company-Operated Restaurants In Michigan To TSFR Apple Venture LLC
DineEquity, Inc. (NYSE: DIN), the parent company of Applebee's
Neighborhood Grill & Bar and IHOP Restaurants, today announced that it
has entered into an asset purchase agreement with TSFR Apple Venture LLC
DineEquity, Inc. (NYSE: DIN), the parent company of Applebee's Neighborhood Grill & Bar and IHOP Restaurants, today announced that it has entered into an asset purchase agreement with TSFR Apple Venture LLC for the sale of 65 Applebee's company-operated restaurants located in Michigan. The agreement does not contain financing contingencies, but closing is subject to regulatory processes related to liquor license transfers and other closing conditions. DineEquity has sold or entered into agreements for all of the 510 domestic Applebee’s company-operated restaurants that were acquired in the acquisition of Applebee’s in 2007, with the exception of 23 test market restaurants. Upon closure of the three pending refranchising transactions, which are expected in the third or early fourth quarter of 2012, DineEquity will have completed its transition to a 99% franchised restaurant system. This makes it unique in the full-service restaurant industry. “We are excited to reach this very important milestone in our history and realize our strategic goal of transitioning the Applebee’s business model away from Company-owned and operated restaurants and toward the pure-play franchisor model we pioneered at IHOP,” said Julia A. Stewart, Chairman and Chief Executive Officer of DineEquity, Inc. “I am very proud of the team at Applebee’s and thank them for their tireless efforts. We look forward to a mutually rewarding partnership with TSFR Apple Venture and are committed to the ongoing success of our franchisees.” Mark Schostak, Executive Chairman of TSFR Apple Venture, said, “The purchase of these restaurants emphasizes our long-term confidence in Applebee’s and its leading position in the casual dining segment, the Michigan economy and TEAM Schostak’s organizational abilities. We are excited about the opportunity to participate in the revitalization strategy to enhance performance and deliver an exceptional dining experience to our guests.” The transaction for 65 Applebee’s restaurants is expected to result in net proceeds after taxes of approximately $61 million and reduce DineEquity's sale-leaseback related financing obligations by approximately $38 million. The Company expects to pay approximately $9 million related to the settlement of net working capital liabilities and deal costs. Additionally, the sale of these Applebee's company-operated restaurants will result in approximately $2.6 million in annualized general and administrative savings.