Darden Restaurants Inc., the owner of its flagship chain, Olive Garden, along with LongHorn Steakhouse, Bahama Breeze, Yard House, and others in its portfolio, is adding a new familiar face in casual dining to its family of brands.
In a statement earlier this week, the Orlando-based company announced it is acquiring Cheddar's Scratch Kitchen for $780 million in an all-cash transaction. Founded in 1979 and known for its high-quality, made-from-scratch scratch menu, Cheddar's now has over 160 locations and average individual restaurant location volumes of $4.4 million, making it Darden's third-largest brand.
"We are excited about the opportunity to be a part of Darden," Cheddar's CEO Ian Baines said. "Our operating philosophy and values are similar and we believe this transaction provides a great opportunity for our team members to continue to grow and develop in their careers. Additionally, Darden's expertise will enable us to further capitalize on our growth potential."
Baines will serve as president of Cheddar's and report to Darden President and CEO Gene Lee, but he is no stranger to Darden Restaurants, as he used to run a tight ship at the Darden-owned Smokey Bones until it was sold in 2012. And according to Lee, Darden Restaurants, which hadn't purchased a brand since the same year it sold Smokey Bones, Darden can benefit from the acquisition in two ways: scale and data.
"Cheddar's is an undisputed casual dining value leader with broad appeal and strong average restaurant volumes," Lee said. "Cheddar's is a great fit in the Darden portfolio because it complements our existing brands."
The complete transaction is expected by Darden's fourth fiscal quarter this year. Will Darden Restaurants be the big cheese in foodservice now that it has Cheddar's in its lineup? Read More