Darden to Buy Chuy’s

Darden Restaurants Inc. (Orlando) has entered a definitive agreement to acquire all the outstanding shares of Chuy’s Holdings Inc. (Austin, Texas) for $37.50 per share, in an all-cash transaction valued at $605 million. Chuy’s will complement Darden’s existing portfolio of brands: Olive Garden, LongHorn Steakhouse, Yard House, Ruth’s Chris Steak House, Cheddar’s Scratch Kitchen, The Capital Grille, Seasons 52, Eddie V’s and Bahama Breeze.

Founded in in 1982, Chuy’s owns and operates full-service restaurants serving made-from-scratch Tex-Mex inspired dishes. Each location offers a unique, “unchained” look and feel, as expressed by its motto, “If you’ve seen one Chuy’s, you’ve seen one Chuy’s!”

The brand had 101 restaurants in 15 states as of July 16, and in the latest 12 months ending March 31 generated total revenues over $450 million, and average annual restaurant volumes of $4.5 million.

“Chuy’s is a differentiated brand within the full-service dining industry with strong performance and growth potential,” said Darden President and CEO Rick Cardenas. “Based on our criteria for adding a brand to the Darden portfolio, we believe Chuy’s is an excellent fit that supports our winning strategy. I am excited to welcome their 7400 team members to Darden and diversify the Darden portfolio into a new dining category.”

Said Steven Hislop, Chairman, CEO and President of Chuy’s: “We are excited about the opportunity to join the Darden family and its portfolio of well-respected brands. Darden shares many of our same core values, particularly our operating philosophy and strong team member cultures. Together we will accelerate our business goals and bring our authentic, made-from-scratch Tex-Mex to more guests and communities.”

While the transaction has been unanimously approved by the boards of both Darden and Chuy’s, the pact includes a 30-day “go-shop” period that will allow Chuy’s to affirmatively solicit alternative proposals from interested parties. In addition, the deal must be approved by Chuy’s shareholders.

Assuming those conditions are met, the transaction is expected to close in Darden’s fiscal second quarter.