Darden Restaurants, headquartered in Orlando, announced that it has agreed to acquire Yard House USA, for $585 million in an all-cash transaction from private equity firm TSG Consumer Partners LLC, management and investors. The total transaction price of $585 million includes approximately $30 million of cash tax benefits that are expected to be realized by Darden in fiscal 2013 and fiscal 2014. The brand will become part of Darden’s Specialty Restaurant Group, which includes The Capital Grille, Bahama Breeze, Seasons 52 and Eddie V’s.
Yard House, which launched its first restaurant in 1996, offers contemporary American cuisine with chef-inspired recipes and ethnic flavors along with a wide range of draft beers and other beverages in a stylish and energetic setting. Created by restaurant veteran Steele Platt, along with partners Harald Herrmann and Carlito Jocson, the brand has grown to 39 restaurants across 13 states.
“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,” said Clarence Otis, Chairman and Chief Executive Officer of Darden. “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.”
“This transaction offers a tremendous opportunity to begin the next chapter in Yard House’s high growth evolution to become a national brand,” said Harald Herrmann, President and Chief Executive Officer of Yard House USA. “We’re excited about the opportunity, and that we and our team members will become a part of one of the world’s largest and most successful restaurant companies.”
“With this addition, Darden’s Specialty Restaurant Group will have nearly $1 billion in annual sales and be even better positioned to sustain annual sales growth of 15% to 20% for years to come,” said 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.”
