Outback Steakhouse Franchisee Files for Bankruptcy
Bloomin' Brands has agreed to a $26.3 million deal to acquire assets from a bankrupt Outback Steakhouse franchisee, with restaurants expected to remain open during the proceedings.
Out West Restaurant Group Files for Bankruptcy
Out West Restaurant Group, which operates Outback Steakhouse locations across the western United States, filed for Chapter 11 bankruptcy protection in Delaware on Monday, according to a filing with the Securities and Exchange Commission.
Acquisition and Financing
Bloomin' Brands has entered into an agreement to purchase Out West's assets for approximately $26.3 million, subject to certain adjustments and the assumption of specified liabilities. The company is expected to serve as the "stalking-horse" bidder in the bankruptcy sale process.
Bloomin' Brands also agreed to provide up to $5.5 million in interest-free debtor-in-possession financing to support Out West's operations during the Chapter 11 proceedings, subject to court approval.
Operations During Bankruptcy
Out West intends to continue operating its restaurants throughout the bankruptcy process. Bloomin' Brands stated that the filing would have no immediate impact on customers, restaurant employees, or daily operations at the affected Outback Steakhouse locations.
Scope of Bankruptcy
The bankruptcy involves restaurants operated by the franchisee rather than Bloomin' Brands' corporate-owned locations. Out West is affiliated with Cerca Trova Restaurant Group, which operates Outback Steakhouse restaurants in several western states.
Potential Outcome
The proposed acquisition could bring the franchisee-operated restaurants under Bloomin' Brands' control if the company prevails in the court-supervised sale process. Bloomin' Brands also owns Carrabba's Italian Grill, Bonefish Grill, and Fleming's Prime Steakhouse & Wine Bar.
Reuters contributed to this report.