A key inflation gauge tracked by the Federal Reserve remained high in March
A key index of underlying inflation that is closely followed by the Federal Reserve remained elevated in March, keeping the Fed on track to raise interest rates next week (April 28)(AP video: Melissa Perez Winder)
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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.
