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4-Traders Homepage  >  Equities  >  Nyse  >  Darden Restaurants    DRI

DARDEN RESTAURANTS (DRI)
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Outback Steakhouse Parent Plans IPO Of Up To $300 Million

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04/06/2012 | 10:14pm CEST

--Move to help pay off debt from 2007 private-equity buyout

--Company going public as high input costs and demand headwinds threaten restaurant sector

--Bloomin' owns and operates most locations

(Updates with additional details throughout on the company.)

 
  By Drew FitzGerald 
  Of  
 

Outback Steakhouse parent Bloomin' Brands Inc. filed plans for an initial public offering of up to $300 million in common stock to help pay down debt taken on from its 2007 private-equity buyout.

The casual-dining company, which also owns Carrabba's Italian Grill, Bonefish Grill, Fleming's Prime Steakhouse and Wine Bar and Roy's, has carried a heavy debt load since its predecessor accepted a roughly $3 billion bid from a group led by private-equity firms Bain Capital Partners LLC and Catterton Management Co.

Bloomin's private-equity backers are now preparing to take the company public during a challenging time for the casual-dining sector, which has struggled in recent years under pressure from cost-conscious consumers and high commodity prices.

Such pressures have hurt Olive Garden parent Darden Restaurants Inc. (>> Darden Restaurants, Inc.), which also owns Red Lobster and Outback competitor LongHorn Steakhouse. Darden's business has fluctuated over the past year as it deals with higher food costs and tougher competition.

Meanwhile, DineEquity Inc. (>> DineEquity Inc), which owns the casual Applebee's and IHOP brands, is undertaking a strategy to sell underperforming company-owned locations to franchise operators to improve its margins, also in response to steep food costs and bargain-hunting diners.

With more than 1,200 company-run restaurants and 195 locations operating under franchise or joint-venture arrangements, Bloomin' already represents a sizable competitor against its publicly listed peers. Darden counts nearly 2,000 locations, while DineEquity has more than 3,900 restaurants around the world.

Outback accounts for the lion's share of Bloomin's business, with 967 locations worldwide. The restaurant chain boasted a No. 1 U.S. market position in the full-service steak restaurant category last year and also holds leading positions in Brazil and in South Korea, according to the company's filing with the U.S. Secuturities and Exchange Commission.

Bloomin' has directed its marketing at generating new traffic and emphasized lower-priced menu items as part of a new strategy launched by Chief Executive Elizabeth A. Smith, a former Kraft Foods Inc. (KFT) executive.

The company pointed to its international business model as a strength that separates it from competitors' strategies. Most of its international restaurants are company-owned or operated through a joint venture instead of through franchisees.

While privately held, Bloomin's earnings totaled $100 million in 2011. The company generated $3.8 billion in revenue last year as its four core concepts, excluding Roy's, reported 4.9% same-restaurant sales growth in the U.S.

The company plans to use proceeds from the offering to retire outstanding debt due 2015, as well as for other corporate purposes. The company had about $248.1 million of principal from senior notes outstanding at the end of last year. Its total indebtedness stood at about $2.1 billion.

Bain Capital currently holds a roughly 66% stake in the company, while funds affiliated with Catterton hold about 14%.

The company plans to list on an as-yet undecided exchange under the symbol BLM.

-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; [email protected]

Stocks mentioned in the article : Darden Restaurants, Inc., DineEquity Inc
Stocks mentioned in the article
ChangeLast1st jan.
DARDEN RESTAURANTS 0.00% 89.76 Delayed Quote.-6.87%
DINE BRANDS GLOBAL INC -0.05% 74.03 Delayed Quote.43.68%
KRAFT FOODS INC --End-of-day quote.
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Financials ($)
Sales 2018 8 072 M
EBIT 2018 775 M
Net income 2018 591 M
Debt 2018 788 M
Yield 2018 2,82%
P/E ratio 2018 19,02
P/E ratio 2019 16,56
EV / Sales 2018 1,47x
EV / Sales 2019 1,39x
Capitalization 11 088 M
Chart DARDEN RESTAURANTS
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Darden Restaurants Technical Analysis Chart | DRI | US2371941053 | 4-Traders
Technical analysis trends DARDEN RESTAURANTS
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TrendsNeutralNeutralNeutral
Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 27
Average target price 100 $
Spread / Average Target 12%
EPS Revisions
Managers
NameTitle
Eugene I. Lee President, Chief Executive Officer & Director
Charles M. Sonsteby Chairman
David C. George Chief Operating Officer & Executive Vice President
Ricardo Cardenas Chief Financial Officer & Senior Vice President
Chris Chang Chief Information Officer & Senior Vice President
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