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Sun Capital said to be eyeing Macaroni Grill

DALLAS Sun Capital Partners Inc. has emerged as the final bidder for Brinker International Inc.’s 224-unit Romano’s Macaroni Grill brand, reported Wednesday, citing unnamed sources.

Aspokeswoman for Brinker said she was “unable to comment on rumor or speculation on the sale of the Romano's Macaroni Grill brand,” which has been on the auction block since August 2007. Sun Capital, a private-equity firm with an appetite for restaurant acquisitions, did not return phone messages about the possible deal, which was reported here.

Sun Capital in March acquired the nearly 200-unit Timothy's Coffees of the World Inc. of Toronto for undisclosed terms. The deal also included 47 Mmmuffins units and 13 Michel’s Baguette quick-service restaurants. The Boca Raton, Fla-based company also owns all or a part of Boston Market, Bruegger’s Enterprises, Crystal Food Services, Dale and Thomas Popcorn, Fazoli’s Restaurants, Friendly Ice Cream Corp., Garden Fresh Restaurant Corp., Real Mex Restaurants, Restaurants Unlimited, Smokey Bones Barbeque and Grill, and Souper Salad.

British news reports have identified Sun Capital as a leading bidder for Regent Inns Plc., the London-based parent of the Old Orleans restaurant chain and Walkabout pubs group, both of which operate outside of the United States.

In an April 22 conference call to discuss third-quarter 2008 earnings, Charles M. Sonsteby, Brinker’s chief financial officer, said challenging credit markets had made the sale of company-owned restaurants more complex.

He said that “one transaction was compromised by the inability of the party to obtain financing and we remain hopeful to announce a signed agreement by the end of the fiscal year with a close date in the first half of fiscal 2009.” Brinker’s fiscal year ends June 25.

Sonsteby said Brinker did have to write down the book value of Macaroni Grill in the third quarter. “We wrote it down to really what would be an expected value if we were to have a sale,” Sonsteby said. “The new book value is about $180 million, $190 million. It’s like $189 million, $190 million.”

Brinker swung to a loss of $38.8 million in its March-ended third quarter, versus a year-ago profit of $54.6 million, because of charges and losses from its Romano’s Macaroni Grill brand up for sale. Revenue in the latest quarter slipped 3.9 percent to $907.7 million, from $944.0 million in the third quarter last year

Brinker has 1,868 restaurants, including 1,439 Chili’s Grill & Bar units, 163 On the Border Mexican Grills and 42 Maggiano’s.

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