Restaurant operator Darden Restaurants, which owns brands like Olive Garden and LongHorn Steakhouse, is adding another prominent dining franchise to its portfolio. The company announced on Wednesday that it agreed to pay $605 million for Tex-Mex restaurant chain Chuy’s.
Darden will acquire all of Chuy’s outstanding shares in the all-cash deal at the price of $37.50 per share, which represents a premium of 40% to the 60-day volume-weighted average price. The deal is also expected to come with additional acquisition and integration expenses of $50 to $55 million.
The boards of directors of Darden and Chuy’s unanimously approved the acquisition, which is expected to be completed by Darden’s fiscal second quarter.
Chuy’s was established in 1982 in Austin, Texas, offering authentic and made-from-scratch Tex-Mex-inspired dishes and grew to 101 locations in 15 states by 2024. The chain generated $450 million in revenue from March 2023 to March 2024.
“Chuy’s is a differentiated brand within the full-service dining industry with strong performance and growth potential,” Darden’s President and CEO Rick Cardenas said in a press release. “Based on our criteria for adding a brand to the Darden portfolio, we believe Chuy’s is an excellent fit that supports our winning strategy.”