Darden Restaurants to Buy Cheddar's Scratch Kitchen For $780M
Olive Garden owner Darden Restaurants said on Monday it would buy Cheddar's Scratch Kitchen for $780 million in an all-cash transaction.
Darden said it would buy the restaurant chain from its shareholders including private equity firms L Catterton and Oak Investment Partners.
Darden shares were up 3.5 percent at $78.22 in extending trading.
Cheddar's, which has 165 locations across 28 states, would add a casual dining chain toDarden's portfolio, which currently includes Olive Garden, LongHorn Steakhouse and Yard House.
Darden said it expects the transaction to be accretive to its adjusted earnings for fiscal 2018 by about 12 cents per share.
The company also reported better-than expected third quarter revenue and profit and forecast full year profit above estimates.
BofA Merrill Lynch is the financial adviser and Hunton & Williams is the legal adviser to Darden. Morgan Stanley is the exclusive financial adviser to Cheddar's.
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Shounak Dasgupta)