US restaurant chain Darden Restaurants to buy Cheddar's Scratch Kitchen for $780 mn
29 March 2017
US restaurant chain Darden Restaurants yesterday struck a deal to buy Cheddar's Scratch Kitchen for $780 million in cash.
Darden is acquiring Cheddar's Scratch Kitchen from its shareholders, including private equity firms L Catterton and Oak Investment Partners.
Darden said that it expects the deal to generate between $20 and $25 million in annual pre-tax run rate synergies by fiscal 2019.
The deal will add to Darden's restaurant portfolio that includes Olive Garden, LongHorn Steakhouse, Yard House, The Capital Grille, Seasons 52, Bahama Breeze and Eddie V's.
In 2014 Darden sold Red Lobster to San Francisco-based Golden Gate Capital for $2.1 billion.
''Cheddar's is an undisputed casual dining value leader with broad appeal and strong average restaurant volumes,'' said Darden president and CEO, Gene Lee in a statement.
''Cheddar's is a great fit in the Darden portfolio because it complements our existing brands. This addition will also enable Darden to further strengthen two of our most important competitive advantages: our significant scale and our extensive data and insights,'' he added.
Cheddar's was founded in 1979 in Arlington, Texas and has 165 locations, including 140 owned and 25 franchised, across 28 states.
Orlando, Florida-based Darden owns and operates more than 1,500 restaurants, employs 150,000 people, and has annual sales of $7 billion.