Outback Steakhouse parent files papers for potential IPO

Outback Steakhouse parent files papers for potential IPO

Move represents second pending restaurant IPO as market conditions, industry trends improve

The parent company of the Outback Steakhouse casual-dining chain may go public again, according to documents filed with the Securities and Exchange Commission this week.

Kangaroo Holdings Inc., parent to Outback operating company OSI Restaurant Partners based in Tampa, Fla., said in filings Tuesday that it is considering an initial public offering of common stock within the next 60 days.

Though the size of the expected offering has not yet been determined, according to the filings. If the IPO does occur, the offering would go toward repaying OSI Restaurant Partners debt and other general corporate purposes, the company said.

OSI operates about 1,400 restaurants under five concepts globally, including the 963-unit Outback Steakhouse chain, the 233-unit Carrabba’s Italian Grill, 152-unit Bonefish Grill, 64-unit Fleming’s Prime Steakhouse and Wine Bar and 22-unit Roy’s.

The filing represents the second restaurant company to consider going public in recent months, as the stock market strengthens and industry trends continue to improve.

In January, Del Frisco’s Restaurant Group LLC filed registration papers to raise $100 million with an IPO [3].

Last year was quiet on the IPO front, aside from the one held by Dunkin’ Brands Inc. in July [4], which garnered about $423 million.

Wall Street watchers say they expect to see more IPO activity by restaurant companies this year.

“It would make sense,” Bart Glenn, an analyst with D.A. Davidson & Co., said. “The restaurant sector has been working well for a while and sales trends are improving.”

OSI was a public company until 2007, when the casual-dining operator was taken private in a $3.2 billion buyout by private-equity firms Bain Capital Partners LLC and Catterton Management Co. LLC, along with company founders.

At the time, the company’s then eight brands were struggling with sinking sales and the move was seen as an attempt to allow the new owners to execute a turnaround as a private company, without market or analyst pressures.

OSI later sold its controlling interest in the 36-unit Cheeseburger in Paradise brand, as well as the six-unit Lee Roy Selmon’s chain.

More recently OSI has reported improving same-store sales trends.

For the September-ended third quarter, Outback Steakhouse’s domestic systemwide same-store sales rose 5.6 percent. Same-store sales rose 6.3 percent at Carrabba’s; 7.4 percent at Bonefish Grill, and 10.1 percent at Fleming’s.

The company did not report same-store sales for Roy’s, which OSI operates as a joint venture. The company has said it plans to exit that concept at some point.

For the latest third quarter, OSI reported a net loss of $8.5 million, compared with a net loss of $7.7 million in the same quarter a year prior. Revenue rose 8.9 percent to $928.3 million.

In January, Liz Smith, OSI’s chief executive, was named chairman of the company’s board of directors [5], replacing former chair Bill Allen, who resigned and took a consulting role to help OSI find acquisition and investment opportunities.

Contact Lisa Jennings at [email protected] [6].
Follow her on Twitter: @livetodineout [7]