Darden (DRI) to Diversify Its Portfolio by Acquiring Chuy's

Acquisition Overview - Darden is set to acquire Chuy's in an all-cash transaction valued at approximately $605 million, following unanimous board approval from both companies [2] - The acquisition price is $37.50 per share for all outstanding shares of Chuy's [8] Financial Expectations - Darden anticipates pre-tax net synergies of about $15 million by the end of fiscal 2026 from this acquisition [3] - The buyout is expected to be accretive to Darden's net earnings per share (EPS) by approximately 12 to 15 cents in fiscal 2027 [3] Chuy's Operational Insights - As of July 16, 2024, Chuy's operates 101 restaurants across 15 states, contributing to Darden's expansion [9] - For the year ending March 31, 2024, Chuy's reported total revenues exceeding $450 million, with average annual restaurant volumes of $4.5 million [9] Capital Allocation Strategy - Darden emphasizes effective capital allocation, focusing on maintaining existing restaurants, expanding new locations, and returning capital to shareholders through dividends and share repurchases [11] - In fiscal 2024, Darden returned $1.1 billion to shareholders, which included $628 million in dividends and $454 million in share repurchases [12] Recent Developments - Darden completed the integration of Ruth's Chris Steak House, achieving expected synergies and an EPS accretion of 10 cents [4] - The company announced a 6.9% increase in its quarterly cash dividend to $1.40 per share, payable on August 1, 2024 [12]