Darden Restaurants (NYSE: DRI), the company behind two fine dining restaurant chains, Eddie V’s and The Capital Grille besides the Olive Garden, announced on Wednesday the acquisition of Ruth’s Hospitality Group (RUTH) for $21.50 per share in an all-cash transaction with an equity value of around $715 million. The acquisition is expected to close in June this year.
Ruth’s Chris is a steak house chain, founded in 1965 and generated “systemwide sales of over $860 million, total revenues over $500 million, and average annual restaurant volumes for company-owned or -operated locations of $6.2 million in Ruth’s fiscal year 2022.”
Darden President and CEO Rick Cardenas stated, “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. It fits the criteria we have for adding a brand to our portfolio and supports our winning strategy. Ruth’s Chris is a great complement to our portfolio of brands.”
Analysts are bullish about DRI stock with a Strong Buy consensus rating based on 17 Buys and five Holds.