Darden Restaurants buys Tex-Mex chain Chuy’s for $605 million
Darden Restaurants is including Tex-Mex to the menu.
The father or mother firm of Olive BackyardLongHorn Steakhouse, Yard Residence and varied chainsstated Wednesday it’s procuring for Chuy’s for roughly $605 million.
Darden stated this can possess all prominent shares of Chuy’s for $37.50 per share. These shares closed at $25.27 apiece on Wednesday, then soared past $37 in after-hours trading once the deal became once introduced. Darden shares fell 1% in after-hours trading.
Darden stated the boards of Darden and Chuy’s bear unanimously authorized the acquisition. The deal is anticipated to terminate later this year, if it’s authorized by Chuy’s shareholders.
Chuy’s Holdings Inc. became once basically based in Austin, Texas, in 1982. It now operates 101 drinking places in 15 states and has 7,400 workers. It’s identified for its eclectic decor and contemporary food, including handmade tortillas and sauces.
Treasure Darden, Chuy’s owns and operates all of its drinking places. Darden President and CEO Rick Cardenas stated Chuy’s is a differentiated ticket with solid increase doubtless that will affect larger Darden’s dining alternate options.
Dardenbasically basically based entirely in Orlando, Florida, operates larger than 1,900 drinking places and has 190,000 workers. It also owns Ruth’s Chris Steak Residence, Cheddar’s Scratch Kitchen, The Capital Grille, Seasons 52, Eddie V’s and Bahama Crawl.
“Constant with our criteria for including a ticket to the Darden portfolio, we imagine Chuy’s is an unheard of fit that helps our a hit strategy,” Cardenas stated in a assertion.
Chuy’s Chairman, CEO and President Steven Hislop stated the acquisition will urge Chuy’s alternate targets and affect larger the ticket to extra communities.
The deal comes as both restaurant corporations bear been struggling with a downturn in buyer traffic due to consumer concerns about inflation.
In Darden’s fiscal fourth quarter, which ended Would possibly perchance well well well also 26, same-retailer gross sales — or gross sales at drinking places begin at least a year — had been flat when when put next with the prior year. Chuy’s same-retailer gross sales had been down 5% in its first quarter, which ended March 31.
Investment bank Jefferies downgraded shares for both restaurant chains earlier this month, announcing they’re being squeezed by mark promotions at snappy-food chains admire McDonald’s as neatly as at informal dining mates admire Chili’s and Applebee’s.
