Olive Garden parent Darden Restaurants Inc. has agreed to purchase taproom chain Yard House USA Inc. from private equity firm TSG Consumer Partners for $565 million.
Under the deals terms, Darden will pay TSG $535 million in cash including $30 million in cash tax benefits. Dardenwhich expects the transaction to close early in the companys second quartersaid the acquisition will dilute earnings by 7-to-10 cents per share in the short term and boost earnings by 3-to-5 cents per share after the 2013 fiscal year.
Yard Housewhich features so-called pub grub and dozens of beer brands on taplaunched in California in 1996, currently operates 39 restaurants in 13 states, and plans to open six new locations in the next year. Darden Restaurants, which generates $8 billion a year in revenue, already owns and operates nearly 2,000 eateries under such brands as Eddie Vs, Longhorn Steakhouse, Red Lobster, and The Capital Grille.
“This transaction offers a tremendous opportunity to begin the next chapter in Yard House’s high-growth evolution to become a national brand,” Yard House president and CEO Harald Herrmann said in a statement. ”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.”
