FNF chairman: American Blue Ribbon, J. Alexander's 'prime IPO candidates'

Both O'Charley's, J. Alexander's put up 4%+ same-store growth in Q2

The majority owner of locally based restaurant companies American Blue Ribbon Holdings and J. Alexander's could bring those companies to the public market sooner rather than later, its top executives said Thursday.

Speaking to analysts and investors on his team's second-quarter earnings conference call, Fidelity National Financial Chairman Bill Foley called both ABRH — the owner of O'Charley's, Village Inn and a number of other concepts — and J. Alexander's, which also runs the Stoney River concept, "prime IPO candidates" as FNF looks to cash in on its investments in the coming years.

"We need to make sure that the financials are in place to generate a good return for our shareholders," Foley told analysts about the companies Fidelity National Financial has controlled in their current guises since 2012.

FNF executives first discussed bringing some of their restaurant properties to market last year, shortly after they had brought J. Alexander's into the fold. On Thursday, President Brent Bickett said both American Blue Ribbon and J. Alexander's — combined, they have about $1.4 billion in annual revenues — each has "their own opportunities" to grow and become independent entities.

FNF execs will find it easier to monetize their restaurant brands if the companies continue to put up the solid numbers they posted in the second quarter. American Blue Ribbon posted adjusted EBITDA of $18 million — down slightly from the year before — on sales of $308 million, which were up 3 percent year over year, and same-store sales growth of 2.5 percent. The O'Charley's brand posted same-store growth of 4.7 perent and finished both April and May atop the closely followed Knapp-Track index that follows sales.

J. Alexander's, meanwhile, grew its Q2 EBITDA to $5 million from $3 million in the spring of 2013 as revenues rose to $50 million. Same-store sales climbed 3.2 percent overall and 4.4 percent at J. Alexander's locations. CEO Lonnie Stout and his team plan to open two or three locations in 2015, adding to their roster of 40 total restaurants.

Asked about the need to scale J. Alexander's before spinning it out, Bickett said Thursday that the company is "always looking to add additional concepts" but added that the FNF team is also happy with how both J. Alexander's and American Blue Ribbon are performing.