DRI - Restaurant M&A: Darden Restaurants to acquire Ruth's Hospitality in $715M deal
2023-05-03 08:15:45 ET
Darden Restaurants ( NYSE: DRI ) struck a deal on Wednesday to acquire Ruth's Hospitality Group ( RUTH ) for $21.50 per share in an all-cash transaction with an equity value of approximately $715M.
Ruth's is the owner and operator of the Ruth's Chris Steak House chain, which is now set to join the Darden brand portfolio of Olive Garden, LongHorn Steakhouse, Yard House, Cheddar's Scratch Kitchen, The Capital Grille, Seasons 52, Bahama Breeze and Eddie V's.
"Ruth's Chris is a strong and distinctive brand in the fine dining segment with an impressive history of delivering elevated dining experiences to their loyal guests," noted Darden CEO Rick Cardenas.
The purchase price represents a 9.4X implied multiple of Ruth's fiscal year 2022 Transaction adjusted EBITDA.
Looking ahead to after the closing, Darden ( DRI ) expects pre-tax synergies of between $5M and $10M within the first year, and between $15M and $20M in the second year. Total acquisition and integration-related expenses are expected to be approximately $55M to $60M. The deal is expected to be accretive to Darden's diluted net earnings per share in fiscal year 2024 by approximately $0.10 to $0.12.
The transaction is expected to be completed in June.
Shares of Ruth's Hospitality were inactive in the premarket session after closing at $16.03 on Tuesday. Darden's tricked down 0.55% .
More on Darden Restaurants:
- Darden Restaurants: To See Normalized EPS Growth In The Near Term
- Read more breakdowns on Dine Brands from Seeking Alpha analysts
- View the relative strength index and moving averages
- See the financial and valuation comparisons to sector peers
- Dig into the Seeking Alpha Quant Rating
For further details see:
Restaurant M&A: Darden Restaurants to acquire Ruth's Hospitality in $715M deal