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Darden Restaurants Agrees To Acquire Yard House USA

 

  

07/12/2012 – Orlando, Fla. (PRNewswire) – Darden Restaurants, Inc. (NYSE: DRI) today announced that it has agreed to acquire Yard House USA, Inc. for $585 million in an all-cash transaction from private equity firm TSG Consumer Partners LLC, management and investors.  The total transaction price of $585 million includes approximately $30 million of cash tax benefits that are expected to be realized by Darden in fiscal 2013 and fiscal 2014.  The brand will become part of Darden's Specialty Restaurant Group, which includes The Capital Grille, Bahama Breeze, Seasons 52 and Eddie V's.  Including acquisition-related costs of approximately seven to ten cents per share, offset partially by Yard House's earnings from operations, the transaction is expected to be dilutive to Darden's diluted net earnings per share in fiscal 2013 by approximately three to five cents and accretive thereafter.  Darden expects to complete the transaction early in its fiscal second quarter.

 

Yard House, which launched its first restaurant in 1996, offers contemporary American cuisine with chef-inspired recipes and ethnic flavors along with a wide range of draft beers and other beverages in a stylish and energetic setting.  Created by restaurant veteran Steele Platt, along with partners Harald Herrmann and Carlito Jocson, the brand has grown to 39 restaurants across 13 states.

 

"Steele, Harald and Carlito have created one of the most differentiated and exciting restaurant brands in America today, with average unit volumes and returns on capital that are among the highest in the industry," said Clarence Otis, Chairman and Chief Executive Officer of Darden.  "Guests in a number of different markets are responding to Yard House's unique combination of handcrafted food, premium beers and other beverages, thoughtful soundtracks and elegantly designed restaurants.  This combination has established Yard House as a great place for a wide range of occasions."

 

"This transaction offers a tremendous opportunity to begin the next chapter in Yard House's high growth evolution to become a national brand," said Harald Herrmann, President and Chief Executive Officer of Yard House USA.  "We're excited about the opportunity, and that we and our team members will become a part of one of the world's largest and most successful restaurant companies."

 

"With this addition, Darden's Specialty Restaurant Group will have nearly $1 billion in annual sales and be even better positioned to sustain annual sales growth of 15% to 20% for years to come," said Otis.  "Now the Group will even more clearly stand with Olive Garden, Red Lobster and LongHorn Steakhouse as a major driver of our growth and value creation.  The Specialty Restaurant Group is also significant because, in appealing to higher percentages of both younger and higher income guests, its brands round out Darden's overall guest base in very important ways."

 

Gene Lee, President of Darden's Specialty Restaurant Group added, "We are delighted to welcome Yard House and its talented team.  Adding this wonderful brand should drive margin expansion as we realize the operating leverage that comes with increased scale and capture cost synergies.  Beyond that, as Yard House continues national expansion, it will benefit from the considerable expertise we have both within the Specialty Restaurant Group and throughout the rest of Darden.  In addition, Yard House's talented leadership team has meaningful expertise in many areas that we will take advantage of to broaden the guest experiences we provide at our other brands.  Finally, the Darden and Yard House cultures mesh well, which we believe is the most critical success factor."

 

Yard House's current 39 restaurants are located across 13 states.  The chain is believed to have strong growth potential.  Average unit volumes are approximately $8.4 million.

 

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Darden Restaurants to Purchase Eddie V's 

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