DineEquity Inc. on Thursday said that it has entered into an agreement to sell 17 company-owned Applebee’s restaurants to a Florida company that operates franchises in two states.
The Glendale owner of the Applebee’s and IHOP restaurant chains said Apple Investors Group LLC. acquired restaurants in Tennessee, Illinois, Mississippi, Missouri, Kentucky and Arkansas. DineEquity, which has been franchising both restaurant brands to reduce debt and other costs, said the transaction will reduce its annual lease obligations by $11.3 million and generate net proceeds of $15.9 million.
“DineEquity's business fundamentals remain strong as we continue moving closer towards achieving our long-term strategic goal of becoming a predominantly franchised system, with 95 percent of our restaurants franchised or soon to be franchised," said Chief Executive Julia Stewart in a statement.
This is the third deal DineEquity has made with Apple Investors, which is based in West Palm Beach and already owns and operates Applebee’s in New Mexico and Virginia.
DineEquity, which owns or franchises more than 3,500 restaurants, so far has sold 259 company-owned Applebee’s since its acquisition of that restaurant chain’s parent company in November 2007. An earlier announced sale of 66 Applebee’s in New England is expected to close next month.
Shares were up $1.64, or 4 percent, to $42.83 in midday trading on the New York Stock Exchange.