Acquisitions

Brazil Joint Venture - In 2013, the Company completed the acquisition of a controlling interest in the Brazil Joint Venture by purchasing 80% of the issued and outstanding capital stock of PGS Par for $110.4 million. As a result of the acquisition, the Company had a 90% interest and the former equity holders of PGS Par (“Former Equity Holders”) retained a noncontrolling interest of 10% in the Brazil Joint Venture.

In connection with the acquisition, the previously-held equity interest was remeasured at fair value. The difference between the fair value and the carrying value of the equity interest held resulted in a $36.6 million gain for fiscal year 2013. The fair value assigned to the previously held equity investment in the Brazil Joint Venture was determined using the income approach, based on a discounted cash flow methodology.

Included in the Company’s operating results for fiscal year 2013 are Revenues of $23.7 million and net income of $0.8 million for the Brazil Joint Venture.

The following table presents summarized financial information for 100% of the Brazil Joint Venture for the period ending as indicated:



	FISCAL YEAR
(dollars in thousands)	2013⁽¹⁾
Net revenue from sales	$	215,050
Gross profit	$	148,229
Income from continuing operations	$	26,945
Net income	$	15,382

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(1)	Summarized financial information for fiscal year 2013 includes results for January 1, 2013 to October 31, 2013, when the Brazil Joint Venture was accounted for as an equity method investment.

The purchase agreement provides the Former Equity Holders with options to sell their remaining interests to OB Brasil (the “put options”) and provides OB Brasil with options to purchase such remaining interests (the “call options” and together with the put options, the “Options”), in various amounts and at various times from 2015 through 2018, subject to acceleration in certain circumstances. The purchase price under each of the Options is based on a multiple of adjusted earnings before interest, taxes, depreciation and amortization of the business, subject to a possible fair market value adjustment. The Options are embedded features within the noncontrolling interest and are classified within the Company’s Consolidated Balance Sheets as Redeemable noncontrolling interests.

In 2015, certain Former Equity Holders exercised options to sell their remaining interests in the Brazil Joint Venture to the Company for total cash consideration of $0.9 million. This transaction resulted in a reduction of $0.6 million and $0.3 million of Mezzanine equity and Additional paid-in capital, respectively, during fiscal year 2015. As a result of the exercise of the options, the Company owned 90.33% of the Brazil Joint Venture as of December 27, 2015.

In connection with the Company’s acquisition of the Brazil Joint Venture, $7.9 million of the Company’s cash was held in escrow for customary indemnification obligations. The Former Equity Holders had an equal amount of cash held in escrow. In 2015, the Company and the Former Equity Holders agreed to release all escrow cash.

Acquisition of Limited Partnership Interests - During 2014, the Company purchased the remaining partnership interests in certain of the Company’s limited partnerships that either owned or had a contractual right to varying percentages of cash flows in 37 Bonefish Grill restaurants for an aggregate purchase price of $17.2 million. These transactions resulted in a reduction of $11.7 million in Additional paid-in capital in the Company’s Consolidated Statement of Changes in Stockholders’ Equity during fiscal year 2014.

The following table sets forth the effect of the acquisition of the limited partnership interests on stockholders’ equity attributable to Bloomin’ Brands for fiscal year 2014:



	NET INCOME ATTRIBUTABLE TO BLOOMIN’ BRANDS AND TRANSFERS TO NONCONTROLLING INTERESTS
	FISCAL YEAR
(dollars in thousands)	2014
Net income attributable to Bloomin’ Brands	$	91,090
Transfers to noncontrolling interests:
Decrease in Bloomin’ Brands additional paid-in capital for purchase of limited partnership interests	(11,662		)
Change from net income attributable to Bloomin’ Brands and transfers to noncontrolling interests	$	79,428

Acquisition of Franchised Restaurants - Effective March 1, 2014, the Company acquired two Bonefish Grill restaurants from a franchisee for a purchase price of $3.2 million, including customary escrow amounts. The Company’s Consolidated Statements of Operations and Comprehensive Income includes the results of operations for these restaurants from the date of acquisition. The pro forma impact of the acquisition on prior periods is not presented as the impact was not material to reported results.

The Company allocated the purchase price to the assets acquired less the liabilities assumed based on their estimated fair value on the date of acquisition with the remaining $2.5 million of the purchase price allocated to goodwill. All goodwill recognized is expected to be deductible for tax purposes.