Darden Restaurants Inc., headquartered in Orlando, Florida, announced a significant acquisition of Chuy’s Holdings Inc. for $605 million. This strategic move aims to expand Darden's portfolio by adding the Tex-Mex chain Chuy’s, known for its distinctive dining experience and strong growth potential.

Acquisition Details

  • Purchase Agreement: Darden will acquire Chuy's shares at $37.50 each, a 40% premium over Chuy's 60-day volume-weighted price.
  • Current Valuation: Chuy’s stock was valued at $25.27 per share as of July 17, with Darden’s closing at $147.35.
  • Operational Scale: Chuy’s has 101 restaurants in 15 states and generated over $450 million in revenue in the last fiscal year.

Strategic Fit

Darden’s President and CEO, Rick Cardenas, emphasized that Chuy's fits well with Darden’s operational philosophy and growth strategy. With 7,400 team members, Chuy's is expected to accelerate its business goals under Darden's management.

Darden’s Presence in Northeast Florida

  • Current Brands: Darden operates Olive Garden, LongHorn Steakhouse, Yard House, Ruth’s Chris Steakhouse, Cheddar’s Scratch Kitchen, The Capital Grille, Seasons 52, Eddie V’s, and Bahama Breeze.
  • Local Footprint: In Northeast Florida, there are nine Longhorns, four Olive Gardens, and multiple other Darden-owned restaurants.

Chuy’s Expansion and Unique Features

Founded in 1982 in Austin, Texas, Chuy’s is known for its unique Tex-Mex offerings and eclectic restaurant decor, including dining rooms with hubcap-covered ceilings.

Closing the Deal

The acquisition is expected to be finalized by Darden’s fiscal second quarter, ending in November.

My Final Thoughts

This acquisition highlights Darden's strategic approach to expanding its portfolio with a well-established and growing brand. Chuy’s distinctive offerings and solid market presence make it a valuable addition to Darden’s diverse restaurant lineup. This move strengthens Darden's market position and promises enhanced growth and innovation opportunities for both brands.

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