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Bloomin' Brands seeks to feed itself in public markets

by Demitri Diakantonis | Published July 26, 2012 at 4:00 AM

Bloomin' Brands Inc. is looking to become the latest restaurant chain to go public.

The Bain Capital LLC-backed Outback Steakhouse operator on Wednesday, July 25, filed an amendment to its initial public offering registration, or S-1.

Bloomin' said it will offer 24.6 million shares at $13 to $15 per share, seeking to raise up to $369 million. In addition to that, the underwriters have an overallotment option to buy up to 3.2 million shares.

Bloomin' originally filed for a $300 million IPO in April, but in May it increased its offering size to $345 million.

If the shares price at $14 per share, at the midpoint of the expected range, it would value the restaurant chain at $1.65 billion. Its enterprise value, including debt, would be $3.2 billion, equal to 8.7 times adjusted Ebitda for the 12 months ending March 31.

Tampa, Fla.-based Bloomin' is planning to sell 10.7 million shares, while Bain and a second private equity sponsor, Catterton Partners, are selling 8.4 million shares in the offering. The two private investment firms will own a combined 64.6% stake in Bloomin' after its IPO.

The PE shops, which led a $3.2 billion leveraged buyout of the chain in 2007, paid $845.8 million for their combined 79.2% ownership stake, according to a 2008 financial filing. At the $14 midpoint, the sponsors would have a paper gain of $338.3 million, or 40%. Bain and Catterton currently own a 78% stake in Bloomin'.

That prospective profit excludes $79.1 million in advisory and management fees Bloomin' has paid its sponsors since the buyout. If the IPO takes place, Bain and Catterton are in line to receive an additional $8 million fee to end the management agreement.

Bank of America Merrill Lynch, Morgan Stanley, Goldman, Sachs & Co., Deutsche Bank Securities Inc. and JPMorgan Chase & Co. are the lead underwriters on the offering. Bloomin' plans to list on the Nasdaq under the symbol BLMN.

Bloomin' said it is going to use the net proceeds from the offering to pay down $248 million in senior notes that are due in 2015. The company had $335 million in cash as of March 31.

In 2011, Bloomin' generated $3.8 billion in revenue and an adjusted Ebitda of $361 million compared to $3.6 billion in revenue along with an adjusted Ebitda of $338 million in 2010.

The chain operates more than 1,200 restaurants under the Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill, Fleming's Prime Steakhouse & Wine Bar and Roy's brands.

It has been a busy week for restaurant IPOs. Shares of Goode Partners LLC-backed Mexican-themed restaurant chain Chuy's Holdings Inc. priced at $13 per share, the high end of its range, on Tuesday. Upscale steakhouse chain Del Frisco's Restaurant Group Inc., backed by Lone Star Funds, is expected to price 7 million shares by Friday within a range of $14 to $16 per share.

--David Carey contributed to this report.

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Bloomin' Brands seeks to feed itself in public markets

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