Darden to acquire Chuy’s for $605M

Darden (DRI) and Chuy‘s (CHUY) have entered into a definitive agreement pursuant to which Darden will acquire all of the outstanding shares of Chuy’s for $37.50 per share, in an all-cash transaction with an enterprise value of approximately $605M. 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 over $450M, and average annual restaurant volumes of $4.5M. The purchase price represents a 10.3x implied multiple of Chuy’s latest twelve months ending March 31. Darden expects pre-tax net synergies of approximately $15M by the end of its FY26. Total acquisition and integration-related expenses are expected to be $50M-$55M, pre-tax. The transaction is expected to be neutral to Darden’s diluted EPS for its FY25, excluding acquisition and integration-related expenses, and accretive by 12c-15c in its FY27. The transaction is expected to be completed in Darden’s Q2. Darden has sufficient liquidity to complete the all-cash transaction.