Darden Restaurants, Inc. entered into a definitive agreement to acquire Chuy's Holdings, Inc. for approximately $660 million.
July 16, 2024
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Darden Restaurants, Inc. (NYSE:DRI) entered into a definitive agreement to acquire Chuy's Holdings, Inc. (NasdaqGS:CHUY) for approximately $660 million on July 17, 2024. Under the terms of the merger agreement, Darden will acquire all of the outstanding shares of Chuy's for $37.50 per share in cash. The definitive merger agreement includes a 30-day "go-shop" period that will allow Chuy's to affirmatively solicit alternative proposals from interested parties. Chuy's will pay Darden a $11,210,529 termination fee or $22,421,057, if merger agreement is terminated under certain circumstances.
Transaction is subject to certain conditions, including the approval by a majority of Chuy's stockholders, the expiration or termination of the applicable waiting period under the HSR Act and other customary conditions. The transaction has been unanimously approved by the boards of directors of both Darden and Chuy's. Chuy's board of directors determined to recommend that Chuy's stockholders vote to adopt the merger agreement. Transaction is expected to be completed in Darden's fiscal second quarter. Darden expects pre-tax net synergies of approximately $15 million by the end of its fiscal 2026. Transaction is expected to be neutral to Darden's diluted net earnings per share for Darden's fiscal 2025, excluding acquisition and integration-related expenses, and accretive by approximately 12 to 15 cents in fiscal 2027.
BofA Securities, Inc. is acting as financial advisor and Charles Brewer and Steven M. Haas of Hunton Andrews Kurth LLP acting as legal advisors to Darden. Piper Sandler & Co. is acting as financial advisor and Charles T. Haag and Justin Reinus of Winston & Strawn LLP acting as legal advisors to Chuy's. Piper Sandler & Co. acted as fairness opinion provider to the board of Chuy's Holdings.
Chuyâs Holdings, Inc. owns and operates full-service restaurants across 16 states serving a distinct menu of authentic, made from scratch Tex-Mex-inspired dishes. It offers a menu for both lunch and dinner, which includes enchiladas, fajitas, tacos, burritos, combination platters and salads complemented by a variety of appetizers and desserts. Each of its restaurants also offers a variety of homemade sauces, including its Hatch Green Chile, Boom-Boom and Creamy Jalapeno sauces, all of which it makes from scratch daily in each restaurant. Its Chuyâs Knock Out (CKO) limited-time food offerings run for six weeks once every quarter and showcase three new menu items. It also offers a full-service bar in all of its restaurants providing its customers a variety of beverage offerings, featuring a selection of specialty cocktails, including its on-the-rocks margaritas made with fresh, hand-squeezed lime juice and the King's Punch, a made-to-order, hand-shaken rum cocktail served in its shaker.