DineEquit Announces the Sale of 65 Applebee's Company-Operated Restaurants for $65M in After Tax Proceeds

DineEquity, Inc.

, the parent company of Applebee's Neighborhood Grill & Bar and IHOP Restaurants, today announced that it has entered into an asset purchase agreement with TSFR Apple Venture LLC for the sale of 65 Applebee's company-operated restaurants located in Michigan. The agreement does not contain financing contingencies, but closing is subject to regulatory processes related to liquor license transfers and other closing conditions. DineEquity has sold or entered into agreements for all of the 510 domestic Applebee's company-operated restaurants that were acquired in the acquisition of Applebee's in 2007, with the exception of 23 test market restaurants. Upon closure of the three pending refranchising transactions, which are expected in the third or early fourth quarter of 2012, DineEquity will have completed its transition to a 99% franchised restaurant system. This makes it unique in the full-service restaurant industry. The transaction for 65 Applebee's restaurants is expected to result in net proceeds after taxes of approximately $61 million and reduce DineEquity's sale-leaseback related financing obligations by approximately $38 million. The Company expects to pay approximately $9 million related to the settlement of net working capital liabilities and deal costs. Additionally, the sale of these Applebee's company-operated restaurants will result in approximately $2.6 million in annualized general and administrative savings.