Outback Steakhouse Owner Plans $300M IPO

Bloomin' Brands Inc., the new Outback Steakhouse parent company, expects to raise $300 million in its initial public offering, according to documents filed Friday with the Securities and Exchange Commission.

The Tampa, Fla.-based Bloomin Brands evolved from OSI Restaurant Partners and Kangaroo Holdings Inc. It said proceeds from the IPO, which it first filed for last month, will pay off $248 million in debt. Additional proceeds will be used for working capital and general corporate use.

The SEC filing did not state how many shares would be sold, when it expects to offer the shares or what the offering per-share price would be.

Bloomin' Brands owns and operates 1,248 restaurants and has an additional 195 restaurants under franchise or joint venture arrangements across 49 states and 21 countries and territories. Restaurant brands include Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill and Fleming's Prime Steakhouse and Wine Bar. The company owns a minority interest in the Roy's Hawaiian Fusion brand.

In 2011, Bloomin' Brands reported profit of $100 million, or 94 cents a share, on revenue of $3.84 billion. A year earlier, the company booked earnings of $52.9 million, or 50 cents per share, on revenue of $3.63 billion, the SEC filing said. In fiscal 2009, OSI had reported a net loss of $64.5 million.

Bloomin' Brands, who's name reflects Outback Steakhouse's signature Bloomin' Onion, was formerly known as Kangaroo Holdings Inc./OSI Restaurants. Kangaroo Holdings was formed in 2007 following a $3.1 billion going-private deal with Bain Capital LLC, Catterton Management Co. LLC and three OSI Restaurant Partners founders Chris Sullivan, Robert Basham and J. Timothy Gannon. Bain reported holding 66 percent of equity and Catterton 14 percent.

In Bloomin' Brands' SEC filing, the company said it had seen its financials stabilize.

"In the U.S., each of our four core concepts generated positive comparable restaurant sales over the last seven consecutive quarters, and in 2010 and 2011, our combined comparable restaurant sales at our core concepts grew 2.7 percent and 4.9 percent, respectively," the document stated. "Additionally, over the last two years, Outback Steakhouse, Carrabba's and Bonefish Grill have significantly outperformed the Knapp-Track Casual Dining Index on traffic growth by 8.5 percent, 11.2 percent and 20.2 percent, respectively."

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Recent performance shows improvement, menu changes

For the company's most recent fourth quarter, OSI reported that its net income almost tripled and same-store sales grew stronger across all brands.

In SEC filings earlier last week, the casual-dining operator said it benefited in part during the quarter from a $33.3 million payment resulting from the settlement in September of a lawsuit involving the franchisees of 56 Outback locations in California.

The legal dispute with T-Bird Nevada LLC, one of its largest franchisees, stemmed from a 2009 lawsuit filed by OSI alleging that the franchise group had defaulted on a loan that the franchisor had guaranteed. OSI contended that the default was a violation of the franchise agreement.

Under the settlement agreement, OSI has the right to acquire all of the equity interests in T-Bird for one year after the closing of a potential IPO.

For the Dec. 31-ended quarter, OSI's net income totaled $36.7 million, up from $12.7 million a year ago.

Among OSI's four core brands, systemwide same-store sales rose 3.6 percent at Outback Steakhouse, 3.5 percent at Carrabba's, 5.9 percent at Bonefish Grill and 0.3 percent at Fleming's Prime Steakhouse and Wine Bar.

The company credited menu innovations, such as the addition of more salads, seafood and side items at Outback Steakhouse, as well as giving guests the option of having their steaks seared, as has been done traditionally, or cooked over a wood-fired grill.

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Carrabba's also introduced a Cucina Casuale section to its menu, offering consumers a more casual dining experience, the company said.

OSI said the company will ratchet up growth, with plans to open 30 or more new restaurants in 2012, both domestically and internationally. During 2011, the company opened 15 restaurants systemwide, and closed 11 others. In addition, 194 Outback locations were renovated.

The company also entered into an agreement to sell nine company-owned Outback locations in Japan to a subsidiary of S Foods Inc., along with the rights to develop the brand there.

In its IPO filing, the new Bloomin' Brands outlined some statistics about its four core brands, including:

Outback Steakhouse: The company owned 669 locations and franchised 106 units in the United States as of Dec. 31. It also owned 111 restaurants, franchised 47 units and operated 34 Outbacks through joint ventures in 21 nations and territories. The average check at domestic Outback units totaled about $20 in 2011. Average unit volumes were $3.0 million in 2011, up from $2.9 million in 2010.

Carrabba's Italian Grill: The company owned 231 of the casual-dining Italian restaurants and franchised one other as of Dec. 31. The chain operates in 32 states. The average check at Carrabba's totaled about $21. Average unit volumes hit $2.95 million in 2011, up from $2.8 million in 2010.

Bonefish Grill: The company owned 151 of the casual seafood concept and franchised seven units as of Dec. 31. The chain operates in 28 states. The average check at Bonefish totaled $23. Average unit volumes were $3.0 million in 2011, up from $2.8 million in 2010.

Fleming's Prime Steakhouse and Wine Bar: The company owned 64 units of the upscale steakhouses as of Dec. 31. The chain operates in 28 states. The average check per person at Fleming's totaled $68 in 2011, while average unit volumes hit $3.7 million in 2011, up from $3.5 million in 2010.

Bloomin' Brands is completing the IPO through Bank of America Merrill Lynch, Morgan Stanley, J.P. Morgan, Deutsche Bank Securities, and Goldman, Sachs & Co.

Lisa Jennings contributed to this report.

Contact Ron Ruggless at ronald.ruggless@penton.com.
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