(Reuters) – Darden Restaurants (NYSE:), owner of the Olive Garden chain, has agreed to acquire full-service restaurant operator Chuy’s Holdings (NASDAQ:) in an all-cash deal with an enterprise value of $605 million. said Wednesday.
The move would add 101 Chuy’s restaurants in 15 U.S. states to Darden’s iconic portfolio of brands, including LongHorn Steakhouse, Yard House, Ruth’s Chris Steak House and Cheddar’s Scratch Kitchen, among others.
Darden will acquire all of Chuy’s outstanding shares for $37.50 per share in cash, representing a 48.4% premium to the stock’s closing price on Wednesday.
Shares of Chuy’s, which has a market capitalization of $436.78 million according to LSEG data, rose more than 47.4% to $37.24 in extended trading, while Darden’s fell about 1%.
The deal, approved by both companies’ boards of directors, is expected to close in Darden’s second fiscal quarter and is expected to be neutral to Darden’s net earnings per share for fiscal 2025.
Darden, which said it has sufficient liquidity to complete the deal entirely in cash, noted that total acquisition and integration-related costs are expected to be between $50 million and $55 million, before taxes.
Founded more than 40 years ago, Chuy’s had total sales of more than $450 million in the twelve months ended March 31, 2024.
BofA Securities acted as financial advisor to Darden, while Piper Sandler advised Chuy’s.
