Darden Restaurants has officially obtained ownership of Chuy’s Tex-Mex, which has locations in Jacksonville at 4914 Town Center Parkway and Gainesville at 3410 SW Archer Road.
Darden Restaurants, Inc. and Chuy’s Holdings, Inc. jointly announced that they have entered into a definitive agreement under which Darden will acquire all of Chuy’s outstanding shares for $37.50 per share in an all-cash transaction with an enterprise value of approximately $605 million, according to a press release. Founded in Austin, Texas, in 1982, Chuy’s owns and operates full-service restaurants that serves authentic, made-from-scratch Tex-Mex-inspired dishes.
“Chuy’s is a differentiated brand within the full-service dining industry with strong performance and growth potential,” said Darden President and CEO Rick Cardenas. “Based on our criteria for adding a brand to the Darden portfolio, we believe Chuy’s is an excellent fit that supports our winning strategy. I am excited to welcome their 7,400 team members to Darden and diversify the Darden portfolio into a new dining category.”
Chuy’s highly flavorful and freshly prepared fare is served in a fun, eclectic, and irreverent atmosphere, while each location offers a unique, “unchained” look and feel, as expressed by Chuy’s motto: “If you’ve seen one Chuy’s, you’ve seen one Chuy’s!” Chuy’s had 101 restaurants in 15 states as of July 16, 2024, and in the latest twelve months ending March 31, 2024, generated total revenues of over $450 million and average annual restaurant volumes of $4.5 million. Chuy’s will complement Darden’s portfolio of iconic brands, which currently includes Olive Garden, LongHorn Steakhouse, Yard House, Ruth’s Chris Steak House, Cheddar’s Scratch Kitchen, The Capital Grille, Seasons 52, Eddie V’s and Bahama Breeze.
“We are excited about the opportunity to join the Darden family and its portfolio of well-respected brands,” Steven Hislop, Chairman, CEO and President of Chuy’s, said in a press release. “Darden shares many of our same core values, particularly our operating philosophy and strong team member cultures. Together, we will accelerate our business goals and bring our authentic, made-from-scratch Tex-Mex to more guests and communities.”
Chuy’s board of directors unanimously approved the merger agreement with Darden and determined to recommend that Chuy’s stockholders vote to adopt it. The definitive merger agreement includes a 30-day “go-shop” period, allowing Chuy’s to affirmatively solicit alternative proposals from interested parties. Darden has sufficient liquidity to complete the all-cash transaction. Darden expects to maintain a strong balance sheet and have sufficient capital to achieve its stated capital allocation priorities of maintaining existing restaurants, growing new restaurants, and returning capital to shareholders through dividends and strategic share repurchases.
The transaction is expected to close in Darden’s fiscal second quarter subject to certain conditions set forth in the merger agreement, including the approval by a majority of Chuy’s stockholders, the expiration or termination of the applicable waiting period under the HSR Act, and other customary conditions.
