Posted: Sep 24, 2018
Estimated $32 million in proceeds to pay down debt
Del Frisco’s Restaurant Group Inc., is moving to pay down its debt with the sale of its 14-unit Sullivan’s Steakhouse chain to Romano’s Macaroni Grill for around $32 million, the Irving, Texas-based company said Tuesday.
The sale, which Del Frisco’s has been considering for at least the past two years, is expected to be completed by Sept. 30, the company said. Net proceeds, which have not yet been finalized, would be used to reduce outstanding indebtedness, the company said.
“The divestiture of Sullivan’s Steakhouse represents the culmination of a strategic alternatives process for the brand that was first announced in March 2018,” the company said in the release announcing the sale.
In its fourth-quarter earnings report in March, Del Frisco’s said it had closed several Sullivan’s locations and had stopped serving lunch at several others. It also said it had put the franchising program for the brand on hold.
Sullivan’s president Scott Smith will remain with Del Frisco’s as president of its flagship Del Frisco’s Double Eagle Steakhouse chain, replacing Ray Risley, who has resigned.
“The sale of Sullivan’s Steakhouse enhances our financial condition while enabling us to sharpen our focus on opportunities with the highest potential for strong returns,” Del Frisco’s CEO Norman Abdallah said in a statement. “These include executing our emerging brands integration and expanding our core concepts of Del Frisco’s Double Eagle Steakhouse, Barcelona Wine Bar and Bartaco. We wish our colleagues at Sullivan’s Steakhouse all the best under their new ownership.”
He added that Smith’s “significant international experience” would be useful as management considers franchising Del Frisco’s overseas.
According to his LinkedIn profile, Smith for a year was president and CEO of Amer Group in Cairo, Egypt, which, among other things, operates Chili’s Grill & Bar locations in that country.
Del Frisco’s Restaurant Group acquired Barteca Restaurant Group, comprised of 15-unit Barcelona Wine Bar and 16-unit Bartaco, in June for $325 million.
“The acquisition of Sullivan’s Steakhouse is precisely aligned with our strategic plan and vision,” Romano’s Macaroni Grill president and CEO Nishant Machado said in the statement announcing the purchase. “We are focused on brands that provide guests with true hospitality and a unique experience, which the Sullivan’s Steakhouse concept and team embodies.”
He added that “the brand complements our existing restaurant portfolio of 85 company-owned Macaroni Grill restaurants in 22 states, plus 23 franchise locations in the U.S. and seven other countries. Under our stewardship, we look forward to taking Sullivan’s Steakhouse to new heights.”
By Bret Thorn
September 18, 2018
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