Olive Garden Buys Ruth Chris Steak House
Darden Restaurants has acquired Ruth’s Hospitality Group in an all-cash deal worth $715 million. Ruth’s Chris Steak House will now become part of Darden’s portfolio of fine-dining establishments, which includes Eddie V’s and the Capital Grille. The acquisition may signal a change in the restaurant industry towards deal-making and expansion.
Darden Restaurants, the parent company of Olive Garden, announced the acquisition of Ruth’s Hospitality Group for $715 million in an all-cash deal. This purchase adds Ruth’s Chris Steak House to Darden’s fine-dining locations, which reported a sales growth of 11.7% in the most recent quarter. Ruth’s Hospitality Group owns over 150 locations, generating $505.9 million in revenue last year.
The acquisition is Darden’s first in at least six years and represents a significant development in the restaurant industry. While major companies such as Yum Brands and Restaurant Brands International have focused on expanding existing chains in recent years, the Ruth’s acquisition and the possible sale of Subway suggest a shift towards deal-making.
Darden will hold a press conference about the acquisition on Thursday, and the deal is expected to close in June. The total integration expenses are estimated to cost more than $60 million.
This acquisition indicates that the restaurant industry is ready to turn the page on a period marked by a lack of deal-making. The restaurant industry has faced significant challenges in recent years, such as rising interest rates and global uncertainties. However, the acquisition shows the strength and resilience of the industry, and the growth of Darden’s fine-dining locations demonstrates the continued demand for high-quality dining experiences.
I hope that this acquisition will encourage other major players in the industry, such as Yum Brands and Restaurant Brands International, to consider similar strategic moves to expand and diversify their portfolios. As the economy continues to recover from the effects of the pandemic, the acquisition of Ruth’s Hospitality Group by Darden Restaurants represents a positive turning point for the industry.
By focusing on expansion and deal-making, companies can capitalize on new opportunities and foster growth, benefiting both businesses and consumers.
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