Bloomin’ Brands Inc., the Tampa, Fla.-based casual-dining company, has agreed to refranchise 67% of its Brazilian Outback Steakhouse restaurant operations to the Brazilian private-equity firm Vinci Partners in a $243 million deal, the company said Friday in releasing earnings for the third quarter ended Sept. 29.
“Vinci is a significant asset management firm with a successful track record of partnerships in the restaurant space,” said Mike Spanos, who assumed the Bloomin CEO position in September, in a call with analysts.
“We are retaining 33% ownership of the business,” Spanos noted. “It has been my experience living and working internationally with franchise partners that combining powerful classic brands with local capability and expertise is the optimal business model to maximize future growth.”
Spanos added: “This transaction will allow us to simplify and focus on our domestic operations. We anticipate closing the transaction this year.”
The strategic refranchise, signed on Nov. 6, includes an ongoing royalty stream from the Brazilian operations, Bloomin’ said.
The purchase price will be paid in two installments: 52% on the closing date and 48% on the first anniversary of the closing date. Bloomin’ has an option to sell its remaining stake in 2028, the company said.
As of Aug. 31, Bloomin’ owned 172 Outback Steakhouses in Brazil.
For the third quarter ended Sept. 24, Bloomin’s net income slipped to $6.9 million, or 8 cents a share, compared to $44.5 million, or 45 cents a share, in the prior-year quarter. Revenues fell to $1.039 billion from $1.080 billion in the same quarter last year.
Same-store sales in the third quarter were down 1.5% for all of Bloomin’s domestic system, with declines of 1.3% at Outback, 1.5% at Carrabba’s, 4.1% at Bonefish, and an increase of 1.2% at Fleming’s.
Bloomin’ Brands owns 1,463 restaurants.
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