Darden acquires Ruth’s Chris for $715M

Deal to return about $25M in synergy cost savings in first two years of Steak House’s integration

Darden agreed to acquire the parent of Ruth’s Chris Steak House for $715M, paying $21.50 per share. The all-cash transaction for Ruth’s Hospitality Group should be completed by June. Ruth’s Chris will be added to Darden’s portfolio, which includes Olive Garden, LongHorn Steakhouse and Yard House, among others.

Rick Cardenas, Darden president and chief executive, said, “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, and I’m pleased to welcome their nearly 5,000 team members to Darden.”

Two exceptional table-service restaurant companies unite

Ruth’s Chris operates 80 units and franchises 74 restaurants globally. Total system sales surpassed $860M and revenue, $500M in the 2022 fiscal year of the brand. Moreover, company locations came in at AUV of $6.2M during fiscal 2022.


Cheryl Henry, President, chief executive and chairperson of Ruth’s, stated, “We are excited about the opportunity to join the Darden family. Our strategy and operating philosophy aligns well with Darden, and we have a strong cultural fit that should ensure a smooth transition. This transaction will also provide more opportunities for our team members to develop in their careers as we continue to grow our 57-year-old iconic brand.”

Darden indicated it has sufficient liquidity to complete the all-cash transaction without additional financing. Moreover, it expects to continue to maintain a strong balance sheet and have the necessary capital to stay true to its operational and growth plans.

Darden management provides deal rationalization

Darden anticipates synergies of $5M to $10M within the first year of Ruth Chris’s integration into the Darden family of brands. During the second year, executives expect $15M to $20M.

The purchase price represents a 9.4x “implied multiple” of the 2022 Transaction Adjusted EBITDA of Ruth’s Chris.

The acquisition will also figure about 10 to12 cents of accretive impact to Darden diluted net earnings per share in fiscal year 2024. This projection is net of acquisition and integration costs, which will come in at $55M to $60M


Henry will continue to lead the Ruth’s Chris brand as president, and report to Cardenas.

The Board of Directors of both Darden and Ruth’s approved the transaction unanimously. However, the deal will be completed when the customary closing conditions and terms of the merger agreement are met.

Hunton Andrews Kurth LLP has served as legal advisor to Darden, and Jefferies LLC has acted as exclusive financial advisor. Kirkland & Ellis LLP is acting as legal advisor to Ruth’s Hospitality Group.

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