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Correction: An earlier version of this story included a restaurant chain that is no longer part of Darden’s portfolio.
The company that owns Ruth’s Chris Steak House is selling to Darden Restaurants, breaking a drought for restaurant acquisitions in the aftermath of COVID, high inflation, a turbulent stock market and growing fears of a recession.
Ruth’s Hospitality Group has more than 150 steakhouse locations worldwide and will expand Darden’s portfolio to 10 chain restaurants with the sale, the company announced Wednesday.
Other Darden fine-dining chains include Capital Grille and Eddie V’s.
Per the companies’ definitive merger agreement, Darden will acquire all of Ruth’s outstanding shares for $21.50 per share in an all-cash transaction with an equity value of approximately $715 million.
Ruth’s — which was founded in 1965 after Ruth Fertel bought Chris Steak House in New Orleans — generated $505.9 million in revenue in 2022 and reported same-store sales growth of 4.5% last quarter.
Acquisition and integration expenses are expected to cost the company between $55 million and $60 million, Darden said, but the estimated revenue generated from the acquisition before taxes are anticipated at $5 – $10 million in the first year.
Darden also owns LongHorn Steakhouse, Olive Garden, Bahama Breeze, Yard House, Cheddar’s Scratch Kitchen and Seasons 52.
The announcement spiked Ruth’s shares nearly 34% in premarket trading Wednesday.
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