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Outback picks from prime stock

OSI hires a president with experience at the same proving grounds as its existing leaders.

By Scott Barancik
Published December 12, 2006

When OSI Restaurant Partners hired Curt Glowacki to run its slumping Outback Steakhouse chain last week, it seemed like a bit of a mismatch.

Outback has more than 900 domestic and international locations, a market capitalization of $3-billion, and a blimp. Dallas-based Mexican Restaurants Inc., a seven-chain company where Glowacki served as CEO, had 81 stores, a market cap of $37-million and some burritos.

But Glowacki, 54, had something else on his resume that is worth more than gold among national restaurant chains: a successful stint at Steak & Ale, the Skull & Bones of the casual-dining sector.

Founded by restaurant guru Norman Brinker, Steak & Ale was considered the first national chain to successfully bridge the gap between fast-food and sit-down dining. Many of the young bucks who were lucky enough to learn at Brinker's feet went on to run or found some of the country's best-known brands, including Bennigan's, Chili's, Applebee's and Outback. OSI co-founders Chris Sullivan, Bob Basham and Tim Gannon were top proteges, as was chief operating officer Paul Avery. Avery has served as acting president of the Tampa-based Outback chain since former president Ben Novello stepped down in July.

"They've known Curt for years and have stayed in touch with him," said Mexican Restaurants chairman Louis Neeb, a former Steak & Ale president himself. "So he's a known quantity. They know his values and what makes him tick."

Glowacki also has admirers at Bain Capital Partners, one of two private equity funds that plans to buy OSI for $40 a share, according to a buyout plan disclosed last month. D³ Family Funds, a Camas, Wash., investment company that has a 35 percent stake in Mexican Restaurants and a seat on its board, counts 30 current or former Bain partners among its small cadre of investors, including everyone who has served as Bain's president or chairman, according to a D³ Web site.

Cara Denver, a D³ partner and Mexican Restaurants director, said that Glowacki has steered the company through tough economic times in which cash-strapped consumers are eating out less. "We slowed the pace of acquisitions and growth, really focusing on improving operations and increasing our profit margins," she said. "That was Curt's strong suit."

OSI did not make Glowacki and senior OSI executives available for an interview. But Fortune's Small Business agreed with Denver's assessment. In June, the magazine ranked Mexican Restaurants 99th on its list of the fastest-growing small, public companies.

Neeb, Mexican Restaurants' chairman, said Glowacki is an intensely competitive natural leader who "has the ability to identify with the board of directors ... and the dishwashers."

"I'm a great fan of Curt's," he said. "Sullivan and those guys owe us."

Times staff researcher Carolyn Edds contributed to this report. Scott Barancik can be reached at barancik@sptimes.com or 727893-8751.

[Last modified December 12, 2006, 00:07:22]