Brinker announces sale of Macaroni Grill
Dallas Business Journal
Brinker International Inc., the parent company of Chili’s, Romano’s Macaroni Grill, On the Border and Maggiano’s Little Italy restaurants, has entered into an agreement to sell a majority of the company’s interest in the Romano’s Macaroni Grill brand to private equity firm Golden Gate Capital.
Based on the agreement, San Francisco-based Golden Gate Capital will pay Brinker $131.5 million in cash for the brand.
Dallas-based Brinker (NYSE: EAT) says it plans to retain a 19.9-percent stake in the chain and has committed to offering Macaroni Grill corporate support services for up to a year, with room for an extension. Brinker also will have members serving on the new corporate entity’s board of directors.
The pending sale is expected to close by the end of 2008.
“Golden Gate is well-known for partnering with corporations to help grow established consumer and retail brands,” said Doug Brooks, chairman and chief executive officer of Brinker International. “Brinker International will retain a minority position in order to both maximize the value to Brinker’s shareholders and contribute to the success of the Macaroni Grill as a stand-alone entity.”
Brinker put its Macaroni Grill Brand on the market earlier this year. The announcement of the sale to Golden Gate comes two weeks after Brinker saw its fourth quarter profit drop to $42.6 million, or 41 cents per share, down from $83.6 million, or 71 cents per share during the same quarter last year.
Brinker attributed its 49 percent profit decline to the rising cost of commodities.
Founded in Dallas by Phil Romano in 1975, the company has more than 1,800 franchises or corporate-owned restaurants in 24 countries.
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