TAMPA Fla. Outback Steakhouse parent OSI Restaurant Partners Inc. intends to sell its Roy’s seafood chain and other holdings that lack the potential to become major businesses, chairman Chris Sullivan reportedly said in a speech here Wednesday to investment bankers.
Although OSI has been expected to peddle its smaller chains since it assumed about $2.4 billion in debt to fund a $3.2 billion leveraged buyout in June, the company had never confirmed the speculation. Last month, OSI disclosed that it was selling 80 percent of six-unit Lee Roy Selmon’s, a Southern-style casual concept, to co-founders Lee Roy Selmon and Peter Barli, the chain’s longtime president.
Roy’s, a 34-unit casual chain named after famed Hawaiian chef Roy Yamaguchi, was the only divestiture candidate specifically cited by Sullivan. OSI’s other concepts include Carrabba’s Italian Grill, Fleming’s Prime Steakhouse & Wine Bar, Bonefish Grill, Cheeseburger in Paradise and Blue Coral Seafood & Spirits. Of the approximately 1,400 restaurants OSI operates, about 950 are Outback Steakhouses.
Sullivan was addressing a meeting of the Association for Corporate Growth, a group consisting largely of mergers-and-acquisitions specialists. He joked that members of the audience could be among the bidders for any brands that OSI decides to divest, according to local coverage of the meeting.
The news stories cited Sullivan’s evident delight that OSI no longer has to contend with such public company distractions as Sarbanes-Oxley accountability regulations and activist shareholders —“intelligent 27-year-olds who have never run a company,” he was quoted as characterizing them.
OSI was taken private by a group that included Sullivan and the company’s two other co-founders, Bob Basham and Tim Gannon. Also participating in the deal were the private-equity giants Bain Capital Partners and Catterton Management Co.
Sullivan repeated earlier indications that Blackstone Group, one of the world’s largest private-equity firms, came very close to buying OSI, but dropped the courtship because the restaurant company’s stock price dropped.
