Darden on Monday announced it completed the sale of Red Lobster to Golden Gate Capital for USD 2.1 billion (EUR 1.6 billion).
“The sale of Red Lobster is the culmination of a robust competitive process that enabled Darden to maximize the value of Red Lobster, eliminate the risks and volatility associated with continuing to own the business, and prove a realistic market-validated valuation of Darden’s real estate assets,” Darden said. “The sale is also consistent with Darden’s strategy of increasing its focus on its Olive Garden brand renaissance program and preserving its dividend.”
“We are excited to have successfully completed the acquisition of Red Lobster, officially beginning our partnership with this iconic brand as it enters into this exciting new chapter of growth,” said Josh Olshansky, managing director at Golden Gate Capital. “We strongly support CEO Kim Lopdrup’s vision to deliver great seafood, great people and great results. We look forward to leveraging the company's unparalleled brand awareness to expand its leadership position in casual dining, and driving long-term success by delighting millions of loyal customers.”
In addition, Darden announced Clarence Otis is stepping down as chairman and CEO. The company’s board of directors has appointed Charles Ledsinger Jr., Darden’s current independent lead director as non-executive chairman of the board, effective immediately. The company also announced that it has amended its corporate governance policies to provide for the separation of the chairman and CEO roles. To ensure a smooth transition, Otis has agreed to continue serving as CEO until the appointment of his successor on 31 December. Otis will remain a director of the company, but will not stand for re-election at the 2014 annual meeting of shareholders.
Otis joined Darden in 1995. He was appointed Chief Executive Officer of Darden in November 2004 and Chairman of Darden's Board in November 2005. For his tenure ending with Darden's fiscal year 2014, the Company grew from 1,381 restaurants with USD 5.2 billion (EUR 3.9 billion) in annual sales to more than 2,200 restaurants with more than USD 8.7 billion (EUR 6.5 billion) in annual sales. From 29 November 2004, when he was appointed CEO, through the end of the company's fiscal 2014, Darden's total shareholder return was 133 percent, outpacing the return of the S&P 500 for the same period by 36 percentage points.
“I am proud to have been a part of Darden's significant growth and expansion, which has enabled us to reach new consumer segments and markets and create significant long-term shareholder value. With the Red Lobster sale complete and progress on our Olive Garden brand renaissance and other strategic priorities underway, this is the right time for me to step down,” Otis said. “Darden benefits from thousands of talented employees who work tirelessly to nourish and delight our guests every day. I am confident that they, under the leadership of our Board and management team, will continue to make progress on the actions we are taking to reinvigorate restaurant performance and further enhance shareholder value.”
