Brinker International, Inc. has entered into a purchase agreement with OTB Acquisition LLC, an affiliate of Golden Gate Capital, to sell its On The Border Mexican Grill & Cantina brand. Terms of the transaction were not disclosed.
The transaction is expected to close by the end of fiscal 2010, subject to the completion of customary closing procedures. Brinker anticipates recording a gain upon completion of the transaction.
Brinker has agreed to provide transitional corporate support services to On The Border through the end of fiscal 2011, which will generate additional fees to offset the internal cost of providing the services. Moelis & Company LLC, is acting as Brinker’s exclusive financial advisor in connection with this transaction.
“On The Border is well positioned to build on its current success and we are confident it will be a great addition to the Golden Gate portfolio,” said Doug Brooks, Chairman and Chief Executive Officer of Brinker International. “This decision enhances long term value for our shareholders and we believe that On The Border will continue to thrive under new ownership.”
Joshua Olshansky, a Managing Director at Golden Gate Capital, was also bullish on the deal. “On The Border is a strong leader in Mexican Casual Dining,” he said. “We are enthusiastic about the Company’s significant growth opportunities and we are very pleased to partner with the On The Border team to continue the success of the brand.”
Golden Gate Capital is a San Francisco-based private equity firm. Over the last five years, Golden Gate has completed over 20 acquisitions in the specialty retail and restaurant sectors with combined annual revenue in excess of $4 billion, including such well known brands as Romano’s Macaroni Grill, Express, Eddie Bauer, and J.Jill.