UPDATE 2-DineEquity to sell 30 restaurants in DC area
* Sale to result in $27 mln after-tax
DETROIT Dec 6 (Reuters) - DineEquity (DIN.N) said on Monday it will sell 30 company-owned Applebee's restaurants in the Washington area in a deal that should bring in about $27 million after taxes.
The operator of the Applebee's and IHOP chains has been selling restaurants as part of its plan to reduce debt and shift restaurant ownership to franchisees.
The sale of the restaurants to Potomac Family Dining is expected to close in the first quarter. Terms were not disclosed.
The agreement also is expected to reduce sale-leaseback related financing obligations associated with 10 properties by about $20 million, DineEquity said.
Glendale, California-based DineEquity has been working on a turnaround at Applebee's, which IHOP bought in a $2 billion leveraged buyout in 2007. The company changed its name from IHOP to DineEquity after that deal.
To date, DineEquity has sold a total of 193 Applebee's company-operated restaurants since its acquisition of of the chain. It expects to complete the previously announced sale of 36 company-operated Applebee's restaurants in Missouri and Illinois in the first quarter as well.
At the end of September, more than 88 percent of DineEquity's Applebee's and IHOP restaurants were franchised. When its pending deals are done, that share will rise to 93 percent, the company said.
DineEquity has said a more franchised business model is less capital intensive and experiences less volatility in cash flow performance compared to the operation of company-operated restaurants.
Potomac Family Dining Group was established by investment banking veteran Timothy George for the deal. He was a financial adviser to DineEquity on its 2007 acquisition of Applebee's International.
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