IHOP Corp. Announces the Sale of 41 Company-Operated Applebee's Restaurants in Southern California and Nevada
19 Mars 2008 - 9:00PM
Marketwired
GLENDALE, CA ("the Company") today announced that it has reached
agreement with Apple American Group LLC for the sale of 41
company-operated Applebee's restaurants located in Southern
California and Nevada. The agreement is reflected in two definitive
asset purchase agreements, one for the Southern California market
and one for the Nevada market. The agreements also provide for
future franchise restaurant development in these markets, which
could result in the development of as many as 14 new Applebee's
restaurants by the end of 2012 throughout Southern California and
within the state of Nevada. Financial details of the transaction
were not disclosed.
Julia A. Stewart, IHOP Corp.'s chairman and chief executive
officer, said, "We are pleased to announce the sale of our first
company-operated markets in line with our strategy to transform
Applebee's into an even more highly franchised system. This
concludes a competitive bidding process for these markets with the
selection of Apple American Group, which places these restaurants
in the hands of an exceptional franchise operator and provides
growth opportunities for the leading restaurant developer within
the Applebee's system. We believe today's commitment by Apple
American Group demonstrates our franchisees' confidence in our
plans to revitalize the Applebee's brand and improve the
operational and financial performance of our restaurants. We are
eager to work with Apple American Group to ensure a smooth and
successful transfer of ownership for our field and restaurant
employees."
Gregory G. Flynn, Apple American's founder, chairman and chief
executive officer, said, "As Applebee's largest franchisee, we are
pleased to be the first partner to extend our relationship and
commitment to the Applebee's brand with the acquisition of these
company-operated restaurants. While it enables Apple American Group
to further leverage our infrastructure, it also affords us an
opportunity to participate in the revitalization of the Applebee's
brand in a significant way. Applebee's new ownership by IHOP Corp.
and the approach leadership intends to take to re-energize the
brand were integral in our decision to acquire additional
restaurants. We are excited about the future prospects of the
Company and look forward to working closely with management as we
improve the performance of the Applebee's brand."
The sale of these two markets is expected to be completed on
separate closing dates in the coming months, subject to regulatory
processes related to liquor license transfer and other customary
closing conditions.
IHOP Corp. remains confident in its expectations of selling
approximately 100 company-operated Applebee's restaurants and
generating a total of $90 to $100 million in after-tax cash
proceeds in fiscal 2008, as previously announced. The Company plans
to use the proceeds from the franchising of its company-operated
Applebee's restaurants primarily to repay a portion of the
Company's consolidated funded debt, among other obligations. In
addition, IHOP Corp.'s objective is to conclude fiscal 2008 with as
many as 60 additional purchase commitments of Applebee's
company-operated restaurants, which would be expected to close
sometime in early 2009.
About IHOP Corp.
Based in Glendale, California, IHOP Corp. franchises and
operates restaurants under the International House of Pancakes, or
IHOP, and the Applebee's Neighborhood Grill & Bar brands. With
more than 3,300 restaurants combined, IHOP Corp. is the largest
full-service restaurant company in the world. IHOP Corp.'s common
stock is listed on the NYSE under the symbol "IHP." For more
information on IHOP Corp., visit the Investor Relations section of
the Company's Web site located at www.ihop.com.
About Apple American Group LLC
Based in San Francisco, California, Apple American Group LLC
currently owns and operates 145 Applebee's Neighborhood Grill and
Bar restaurants in California, Washington State, Indiana, Ohio,
Pennsylvania, West Virginia, Delaware and New Jersey. With $380
million in 2007 sales and directly employing over 9,600 people,
Apple American Group is the largest franchisee in the Applebee's
system and the 3rd largest restaurant franchisee in the United
States. In 2007, it was named Franchisee of the Year by Applebee's
International and Franchisee Entrepreneur of the Year by Nation's
Restaurant News. It has perennially ranked as one of Applebee's
best operators and most active developers, and it has enjoyed sales
growth in excess of 15% per year compounded over the last 10 years.
For more information on Apple American Group, visit
www.appleamerican.com.
Forward-Looking Statements
There are forward-looking statements contained in this news
release. They use such words as "may," "will," "expect," "believe,"
"plan," or other similar terminology, and include statements
regarding the strategic and financial benefits of the acquisition
of Applebee's International, Inc., expectations regarding
integration and cost savings, and other financial guidance. These
statements involve known and unknown risks, uncertainties and other
factors, which may cause the actual results to be materially
different than those expressed or implied in such statements. These
factors include, but are not limited to: the implementation of the
Company's strategic growth plan; the availability of suitable
locations and terms for the sites designated for development; the
ability of franchise developers to fulfill their commitments to
build new restaurants in the numbers and time frames covered by
their development agreements; legislation and government regulation
including the ability to obtain satisfactory regulatory approvals;
risks associated with executing the Company's strategic plan for
Applebee's; risks associated with the Company's incurrence of
significant indebtedness to finance the acquisition; the failure to
realize the synergies and other perceived advantages resulting from
the acquisition; costs and potential litigation associated with the
acquisition; the ability to retain key personnel after the
acquisition; conditions beyond the Company's control such as
weather, natural disasters, disease outbreaks, epidemics or
pandemics impacting the Company's customers or food supplies or
acts of war or terrorism; availability and cost of materials and
labor; cost and availability of capital; competition; continuing
acceptance of the IHOP, International House of Pancakes and
Applebee's brands and concepts by guests and franchisees; the
Company's overall marketing, operational and financial performance;
economic and political conditions; adoption of new, or changes in,
accounting policies and practices; and other factors discussed from
time to time in the Company's news releases, public statements
and/or filings with the Securities and Exchange Commission,
especially the "Risk Factors" sections of Annual and Quarterly
Reports on Forms 10-K and 10-Q, as well as releases, statements and
SEC filings by Applebee's International, Inc. prior to its
acquisition by the Company. Forward-looking information is provided
by IHOP Corp. pursuant to the safe harbor established under the
Private Securities Litigation Reform Act of 1995 and should be
evaluated in the context of these factors. In addition, the Company
disclaims any intent or obligation to update these forward-looking
statements.
Contact: Stacy Roughan Director, Investor Relations IHOP Corp.
818-637-3632
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