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South Korea’s SkyLake Investment has completed a second capitalization of Outback Steakhouse Korea since its acquisition of the company in 2016, in a move to lock in more gains before its planned exit.

The Seoul-based PE firm has completed a 63 billion won capitalization of its portfolio company Outback Steakhouse, sources familiar with the matter said on February 27. Korea Development Bank and DGB Daegu Bank arranged the capitalization, which consists of a 60 billion won term loan and a 3 billion won revolving credit facility. Lakeside Dining, a holding company of Outback steakhouse, was the borrower in the transaction.

SkyLake acquired Outback Steakhouse in 2016 for about 57 billion won, with all invested capital drawn down from its buyout fund. Two years after the acquisition of the restaurant chain, the PE firm conducted a first recapitalization worth 45 billion won.

At the time, Outback Steakhouse and its holding company took on new debt worth 20 billion won and 25 billion won, respectively. KB Kookmin Bank arranged the credit facility, which was supposed to mature in five years. By using the proceeds from this transaction to pay a dividend, SkyLake partially exited its investment in the restaurant chain.

The steakhouse chain repaid all 20 billion won with cash generated from its operations during the last year. Meanwhile, the amount of debt owed by the holding company was repaid with the proceeds from the latest recapitalization, with the remaining proceeds worth about 40 billion won used to pay a dividend again.

SkyLake is currently in the process of selling Outback Steakhouse. Through two rounds of recapitalization and dividends over the last couple of years, the firm reportedly already realized more than 100 billion won, making a partial exit worth nearly two times invested capital.

Under the ownership of SkyLake, Outback Steakhouse continued to expand, with strategies of developing new menu items and improving supply chain processes gradually paying off.

In 2018, its operating profit increased to 13 billion won from 7.5 billion won in 2017 and 2.5 billion won in 2016, while EBITDA has grown at a CAGR of 50 percent since 2016. EBITDA for 2019 is expected to be 26.5 billion won, an increase from 22.5 billion won posted in 2018.

(By reporter Han Hee-yeon)