Dave's Dispatch 
Recent Posts
- Buy (and eat) local
- Help: Boost sales by choosing words carefully
- Tell me: How do you pick a conference?
- Quiz: Flipping for Youtiao
- Tell me: What would it take for you to leave?
- Why Eva Longoria loves fast food
- Bonuses for diversity hiring
- The end for two, sort of
- BUCA: "A sad day for a vibrant concept"
- Big idea: street food
Recent Comments
- Debra B on Tell me: How do you pick a conference?
- David on Tell me: How do you pick a conference?
- Mark M on Tell me: How do you pick a conference?
- Dan S on Tell me: How do you pick a conference?
- Dave on Quiz: Flipping for Youtiao
Most Commented On
- Micatrotto: 'LIke a very large restaurant.' (27)
- McDonald's "gay support" issue (21)
- Making Servers Pay: Cold-Hearted or cost-effective? (16)
- Same old, same old integrity (10)
- Max & Erma's, Part 2 (6)
Archives
- August 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
- January 2008
- December 2007
- November 2007
- October 2007
- September 2007
- August 2007
- July 2007
- June 2007
- May 2007
- April 2007
- March 2007
- February 2007
- January 2007
- December 2006
- November 2006
- October 2006
- September 2006
- August 2006
- July 2006
- June 2006
- May 2006
- April 2006
- January 2006
Blog
Link This | Email this | Blog This | Comments (0)
Applebee's: The first batch
All Flynn has said so far has come in the form of a press release in which he declared his happiness at being "the first partner" to purchase company-operated Applebee's and praised the franchisor for providing inspiration. "[T]he approach leadership intends to take to re-energize the brand were integral in our decision to acquire additional restaurants," he noted. The units he bought are in Las Vegas and Southern California.
Meanwhile, the guessing game begins. An investment banker I spoke to on the condition I wouldn't use his name said an also-ran franchisee in the bidding process told him he was willing to pay five-and-a-half times cash flow. The investment banker thus reasons Flynn could have coughed up six-and-a-half times for the units. That's a stiff price, the investment added, considering the two markets are practically the epicenter of the country's subprime disaster. Word on the street is that casual-dining guests counts are plunging in both areas by double digits.
The investment banker was startled nonetheless given that he had heard the "inside [the company] number" was four-and-a-half times cash flow.
Here's the rub. Those restaurants were likely the best of the 500-plus company Applebee's IHOP want to unload to help de-leverage the $2 billion acquisition price. Said another financial professional I talked to: "In these kinds of deals the best stores always go first."
Applebee's: The first batch
March 22, 2008
Gregory G. Flynn, Apple American's founder, chairman and CEO, didn't call me back last week to reveal how much he paid for the 41 company-owned Applebee's units he acquired from parent IHOP last week. Darn. Discovering the cash flow multiple, of course, is of major interest to those watching this intriguing deal as an indication of current valuations among beleaguered bar-and-grill chains.
 |
| Multiple questions: How much did Gregory Flynn cough up? |
Meanwhile, the guessing game begins. An investment banker I spoke to on the condition I wouldn't use his name said an also-ran franchisee in the bidding process told him he was willing to pay five-and-a-half times cash flow. The investment banker thus reasons Flynn could have coughed up six-and-a-half times for the units. That's a stiff price, the investment added, considering the two markets are practically the epicenter of the country's subprime disaster. Word on the street is that casual-dining guests counts are plunging in both areas by double digits.
The investment banker was startled nonetheless given that he had heard the "inside [the company] number" was four-and-a-half times cash flow.
Here's the rub. Those restaurants were likely the best of the 500-plus company Applebee's IHOP want to unload to help de-leverage the $2 billion acquisition price. Said another financial professional I talked to: "In these kinds of deals the best stores always go first."
Posted by David Farkas on March 22, 2008 | Comments (0)
Advertisement
Advertisements
