Applebee's Owner Wants to Ramp Up Growth With an Acquisition
(Bloomberg) -- Dine Brands Global Inc. is shopping for a new chain to spice up its portfolio and grow beyond its casual-dining stalwarts of Applebee’s and IHOP.
“We’re looking at a number of different concepts,” Chief Executive Officer Steve Joyce said in an interview. “There are several conversations going on right now.”
The company, which has been trying to boost sales at its IHOP breakfast chain, is looking beyond the casual sit-down restaurant model. Competitors such as Inspire Brands Inc. and Restaurant Brands International Inc., meanwhile, have expanded into different take-out and fast-food formats to capture more consumers.
Large restaurant operators also are looking past their legacy chains and turning to different areas where there’s more room for growth. Olive Garden owner Darden Restaurants Inc. spent $780 million on Cheddar’s Scratch Kitchen last year, while Del Frisco’s Restaurant Group Inc. agreed to buy Barteca Restaurant Group earlier this year for $325 million.
Dine Brands has experienced success recently with Applebee’s: Comparable sales there beat estimates last quarter with discounted drinks and meals, a national ad campaign and a growing to-go business. The shares have jumped more than 50 percent so far this year.
The company, which has about 3,700 restaurants globally, is now looking for a chain with a founder who is involved in the business and that could grow to 1,000 locations, Joyce said.
“What we bring to that founder is the opportunity to take their dream from a regional brand to a nationwide, and potentially global brand,” he said.
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