Agreement of Purchase and Sale of Real Estate
On August 2, 2018, Brinker Property Corporation and Brinker Propco Florida, Inc. (collectively, “Sellers”), each a wholly owned subsidiary of Brinker International, Inc. (the “Company”), entered into an Agreement of Purchase and Sale of Real Estate (the “Sale Agreement”) with Realty Income Corporation (the “Purchaser”) for the sale of up to 45 properties (the “Properties”) to Purchaser for an aggregate purchase price, exclusive of closing costs, of up to approximately $146.6 million. Pursuant to the Sale Agreement and upon the closing of the sale of the Properties, the Sellers will enter into lease agreements with Purchaser for each of the respective Properties sold by them for initial terms of 15 years. Each lease agreement will be guaranteed by the Company. Under their respective leases for the Properties, each Seller will have options for five-year renewals of the terms of the leases, with the total number of options varying by Property.
There is no assurance at this time that the Purchaser will in fact purchase any or all of the Properties. The closing of the sale of the Properties, which is subject to customary closing conditions, is expected to occur on or around August 9, 2018.
Purchaser does not have any material relationship with the Company or its subsidiaries, other than through the Sale Agreement.
Item 2 - Financial Information
Item 2.01 - Completion of Acquisition or Disposition of Assets.
Sale and Leaseback Transaction
On August 6, 2018, Brinker Property Corporation and Brinker Propco Florida, Inc. (collectively, “Sellers”), each a wholly owned subsidiary of Brinker International, Inc. (the “Company”) completed the sale and leaseback (the “Sale/Leaseback”) of 45 of their owned restaurant locations to various assignees of SunTrust Equity Funding, LLC (the “Purchaser”). The Sale/Leaseback was completed pursuant to the agreement with the Purchaser described in a Current Report on Form 8-K filed by the Company on August 1, 2018. Total consideration received in the transaction was approximately $143.2 million, and net proceeds will be used to repay borrowings on the Company’s revolving credit facility. The consideration was determined based on practices typical for transactions of this nature, including review of competitive bids received from third parties for similar properties. An additional five properties included in the previously announced agreement with the Purchaser may be sold after resolution of certain real estate related matters.
SunTrust Bank, an affiliate of the Purchaser, is one of the lending banks party to the Company’s $1 billion revolving credit agreement and provides various other banking services to the Company from time to time
