Brinker International Inc. wants Romano's Macaroni Grill off its menu. The owner of casual dining restaurants sold its majority share of the Italian eatery to MacAcquisition LLC for $131.5 million in cash on Aug. 18. Brinker will still retain a 19.9% interest in Macaroni Grill. For Fitch Ratings, the sale had no impact on Brinker's debt ratings. Fitch maintains a BBB- rating and negative outlook on Brinker.
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The deal frees up additional cash for Brinker, which a little over a year ago, sold 95 Chili's restaurant locations for $155 million. The divestments seem like a good cushion for Brinker, since the economy is slowing down and consumers seem to be paring down their discretionary spending. Meanwhile, Fitch "expects the company to use a significant portion of its free cash flow for debt reduction to improve its credit profile."
Despite the Macaroni Grill sale, the Dallas-based company still has an affinity for Italian cuisine via its family-style chain, Maggiano's Little
Italy. - Gerald Magpily
See TheDeal.com: Brinker to sell Romano's (subscription required)
See Fitch pressl release (registration required)
