GLENDALE, Calif. — DineEquity Inc. said Tuesday that it has agreed to sell 33 company-operated Applebee's Neighborhood Grill & Bar restaurants to a private equity firm for net proceeds of about $26 million.
DineEquity, which also owns the IHOP Restaurants chain, said the restaurants being bought by Greenwich, Conn.-based American Franchise Capital LLC are located primarily in Missouri and Indiana.
The deal isn't contingent on financing, but closing is subject to the transfer of liquor licenses and other customary closing conditions, the company said.
In addition to the after-tax proceeds, DineEquity said the sale will reduce its sale-leaseback related financing obligations by about $22 million. The company said it also expects to pay about $5 million related to the settlement of net working capital liabilities and deal costs.
The sale, which is expected to close in the third quarter, is also expected to result in about $1.3 million in annual general and administrative savings, Dine Equity said.
DineEquity has sold a total of 342 Applebee's company-operated restaurants since its 2007 acquisition of the restaurant chain. Once this sale and a separate sale of 39 restaurants in Virginia close, a total of 97 percent of DineEquity's restaurants will be franchised, the company said.
DineEquity shares rose 42 cents to $48.61 in morning trading Tuesday. Its shares are up 38 percent from their 52-week low of $35.20 in early October, but are still 14 percent below their high for the year of $56.37 last July.