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DineEquity to sell 56 Applebee's for $38M

Company also signs $950 million credit facility

DineEquity Inc. said Monday it has inked two deals to sell 56 corporate Applebee's Neighborhood Grill & Bar restaurants to franchisees for a total of $38 million.

Separately on Monday, the Glendale, Calif.-based company said it had entered into a new $950 million credit facility, which includes a $900 million senior secured term loan maturing in 2017, and a $50 million senior secured revolving loan maturing in 2015.

DineEquity's latest refranchising deals include a sale of 36 Applebee's units in Missouri and Illinois to Mid River Restaurants LLC, and a separate sale of 20 Applebee's units in Virginia to Apple Investors Group LLC. Both are subject to regulatory approval and are expected to close in the fourth quarter, DineEquity said.

Mid River Restaurants is an affiliate of Southern River Restaurants, a franchisee that operates 12 Applebee's restaurants in Louisiana. Apple Investors Group already operates seven Applebee's restaurants in Albuquerque, N.M., as well as 18 IHOPs, three Stevi B's units and two hotels in Florida.

The two deals are expected to generate $38 million in after-tax proceeds, DineEquity said. After the closing of the deals — along with an earlier refranchising agreement for 63 corporate Applebee's in Minnesota and Wisconsin — DineEquity said franchised restaurants would make up 92 percent of its nearly 3,500 locations under both the Applebee’s and IHOP brands.

DineEquity’s new credit agreement includes a provision that would allow the company to increase the credit facility by up to $250 million under certain conditions. The banks involved in the agreement include: Barclays Bank PLC as administrative agent; Raymond James Realty Inc. as documentation agent; Barclays Capital as joint lead arranger and joint book manager; and Goldman Sachs Bank USA as joint lead arranger, joint book manager and syndication agent.

At the end of its June 30-ended third quarter, DineEquity operated or franchised 2,000 Applebee's restaurants and 1,466 IHOP locations.

Contact Molly Gise at [email protected].

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