Three patterns run through Brinker International's acquisitions — what it looks for, how it pays, and how it folds in what it buys.
01
Acquisition criteria
Franchise buy-backs, not new-brand M&A: every 2010s acquisition was Brinker re-a...
Franchise buy-backs, not new-brand M&A: every 2010s acquisition was Brinker re-acquiring previously franchised Chili's restaurants (Canada 2013, Pepper Dining 2015, ERJ Dining 2019) to bring high-performing units under direct company operation and capture their earnings and cash flow.
Small, credit-facility-funded, bolt-on deals: disclosed purchase prices are mode...
Small, credit-facility-funded, bolt-on deals: disclosed purchase prices are modest ($24.6M, $106.5M, $96.0M), each funded from the existing revolving credit facility and pitched as EPS/cash-flow accretive rather than transformational.
Net divestor of secondary brands: alongside these buy-backs Brinker exited non-c...
Net divestor of secondary brands: alongside these buy-backs Brinker exited non-core concepts (Macaroni Grill, On The Border, Corner Bakery), concentrating the portfolio on Chili's and Maggiano's — so its acquisition activity is really portfolio pruning plus franchise reconsolidation.
4 acquisitions — each with the deal value, financing structure, target revenue, and executive commentary where disclosed.
01Maggiano's Little ItalyNot disclosed
Disclosed in 8-K
Brinker acquired the Maggiano's Little Italy polished-casual Italian concept, adding a second brand alongside Chili's; the deal predates modern electronic SEC filings and no purchase price is disclosed in available filings.
We completed the acquisition of Maggiano's in August 1995.
0211 Chili's restaurants (Alberta, Canada)$24.6M
Announced Jun 2013•Closed Jun 2013
Brinker bought back 11 franchised Chili's restaurants in Alberta, Canada from an existing franchisee to pursue direct company-owned growth of the Chili's brand in the Canadian market.
On June 1, 2013, we completed the acquisition of 11 Chili's restaurants in Alberta, Canada from an existing franchisee for $24.6 million in cash.
03Pepper Dining Holding Corp.$106.5M
Announced Jun 2015•Closed Jun 2015
Brinker acquired Pepper Dining Holding Corp., a franchisee operating 103 Chili's Grill & Bar restaurants primarily in the Northeast and Southeast U.S., to bring the units under company operation and roll out its loyalty program and reimaging.
Brinker International, Inc. (NYSE: EAT) today announced it has acquired Pepper Dining Holding Corp., a franchisee of 103 Chili's Grill & Bar restaurants... The purchase price of $106.5 million was funded with availability under Brinker's existing credit facility.
04ERJ Dining (116 Chili's restaurants)$96.0M
Announced Sep 2019•Closed Sep 2019
Brinker completed the acquisition of 116 Chili's Grill & Bar restaurants (generating ~$300M annualized revenue) from its 14-year franchisee ERJ Dining, primarily in the Midwest, funded from its credit facility and expected to be EPS and cash-flow accretive; total cash consideration was $96.0 million per the FY2020 10-K.
Total cash consideration of $96.0 million, including post-closing adjustments, was funded with borrowings from our existing credit facility. We accounted for this acquisition as a business combination.