Darden Restaurants on Friday agreed to acquire Yard House USA for USD 585 million in cash transaction from private equity firm TSG Consumer Partners LLC.
The purchase of the 39-restaurant chain is the second major acquisition for the Orlando, Fla.-based casual-dining powerhouse in the past nine months. Last October, Darden Restaurants landed Eddie V’s Prime Seafood and Wildfish Seafood Grille from Eddie V’s Restaurants for USD 59 million.
The Yard House brand — which opened its first restaurant in 1996 and features a wide array of draught beer — will become part of Darden’s Specialty Restaurant Group, including Eddie V’s as well as The Capital Grille, Bahama Breeze and Seasons 52. The chain will continue to grow nationally, according to Gene Lee, president of the Specialty Restaurant Group.
The acquisition also means that the Specialty Restaurant Group’s sales will near USD 1 billion and “be even better positioned to sustain annual sales growth of 15 percent to 20 percent for years to come,” said Darden Chairman and CEO Clarence Otis. “Now the Group will even more clearly stand with Olive Garden, Red Lobster and LongHorn Steakhouse as a major driver of our growth and value creation. The Specialty Restaurant Group is also significant because, in appealing to higher percentages of both younger and higher income guests, its brands round out Darden’s overall guest base in very important ways.”
Yard House was created by restaurant industry veteran Steele Platt, along with partners Harald Herrmann and Carlito Jocson.
“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,” added Otis. “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.”
The USD 585 acquisition includes about USD 30 million in cash tax benefits that Darden expects to collect in fiscal 2013 and 2014.
The deal is projected to be completed early in Darden’s fiscal second quarter.
