IHOP to Sell, Leaseback 187 Applebee's

GLENDALE, CA-Six months after completing its $2-billion acquisition of Applebee’s International Inc., IHOP Corp. has signed an agreement to sell and lease back 187 company-owned Applebee’s locations. The buyer is a trio of Drawbridge funds, which have been formed by New York City-based Fortress Investment Group.

The deal is expected to generate gross proceeds of about $347 million before taxes, according to a press release from locally based IHOP. An SEC filing by the company states that assuming the sale price of $347 million, “the net after-tax cash proceeds would be approximately $294 million.” It plans to use all after-tax proceeds to pay down debt.

The deal is expected to close no later than June 16. The gross price is subject to adjustment based on restaurant sales for the 12-month trailing period ended this April 30. Those results are not yet available, but the final price is to be set no later than June 1.