Darden Restaurants to acquire Yard House from TSG
Darden Restaurants has agreed to acquire Yard House USA for USD585m in an all-cash transaction from private equity firm TSG Consumer Partners, management and investors.
The total transaction price of USD585m includes approximately USD30m of cash tax benefits that are expected to be realised 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 flavours along with a wide range of draft beers and other beverages. 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," says 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," says 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."
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