ORLANDO, Fla. – The owner of the Olive Garden and Red Lobster restaurant chains has agreed to buy the parent of Capital Grille for $1.4 billion, including the assumption of debt.
Orlando-based Darden Restaurants Inc. will pay $38.15 per share in cash (for a total of $1.19 billion) for Rare Hospitality International Inc., which is based in Atlanta.
Besides the 28 Capital Grille restaurants – including the Providence original – Rare Hospitality owns 287 LongHorn restaurants. The company had sales of $986.9 million in its most recent fiscal year, according to Bloomberg News.
“Darden gets a well-run brand in LongHorn that has legs, so it’s not a fixer-upper,” New York-based restaurant consultant Malcolm Knapp told Bloomberg News. “This is a known quantity, where they can apply their financial muscle and just keep rolling it.”
Darden, which has nearly 1,400 restaurants and had sales of $5.57 billion last year, will finance the deal through loans and cash on hand. The company said it expects to cut costs by more price-efficient supply purchasing, improved distribution and cutting corporate and restaurant support staff.
