Olive Garden owner Darden to Acquire Chuy’s in a $605 Million All-Cash Deal

Olive Garden owner Darden Restaurants, Inc. (DRI) on July 17, 2024, entered into a definitive agreement to buy full-service restaurant operator Chuy’s Holdings, Inc. (CHUY) in an all-cash deal for $605 million.

Deal Structure:

As per the agreement, Darden will buy Chuy’s for $37.50 per share in cash, representing a premium of 48.40% from the stock’s last close.

Company Profile:

Founded in Austin, Texas, in 1982, Chuy’s Holdings, Inc. owns and operates full-service restaurants across the U.S., offering authentic, made-from-scratch Tex-Mex dishes that blend traditional Mexican cuisine with Texan influences.

Darden Restaurants, Inc., based in Orlando and incorporated in 1995, owns and operates full-service restaurants in the U.S. and Canada, featuring brands such as Olive Garden, LongHorn Steakhouse, Yard House, and Ruth’s Chris Steak House, among others.

Deal Details and Timeline:

The acquisition would bring Chuy’s 101 restaurants, located across 15 states in the U.S., into Darden’s portfolio of brands.

Darden, affirming it has sufficient liquidity to complete the all-cash deal, noted that total acquisition and integration expenses are expected to be between $50 million and $55 million pre-tax. Chuy’s reported total revenues of over $450 million for the twelve months ending March 31, 2024.

Chuy’s current EV/EBITDA (TTM) ratio is 9.99, below the sector median of 11.05.

The transaction is anticipated to close in Darden’s fiscal second quarter in November 2024 and is projected to have a neutral impact on Darden’s net earnings per share for fiscal 2025.

Deal Metrics:

For a more detailed analysis of this M&A transaction, please visit the Deal Metrics page here:

Deal Metrics for the acquisition of Chuy’s Holdings, Inc. (CHUY) by Darden Restaurants, Inc. (DRI)

The Deal Metrics page for each merger or acquisition includes:

• A spread history chart of the merger from announcement to completion or failure.
• Every event as the merger progresses through regulatory approvals, shareholder votes, expiration of the HSR period, etc.
• News and SEC filings related to the deal.
• A history of updates on the deal.
• And much more.

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Editor’s Note: Baranjot Kaur contributed to this article