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The deal values Ruth’s at $21.50 per share in an all-cash transaction. The steakhouse has more than 150 locations worldwide and generated $505.9 million in revenue in 2022. Ruth’s stock closed Tuesday at $16 per share.
Ruth’s will join Darden’s fine-dining portfolio, which already includes The Capital Grille and Eddie V’s. The steakhouse is Darden’s first acquisition in six years. It bought Cheddar’s Scratch Kitchen in 2017 for $780 million.
The announcement precedes Ruth’s first-quarter earnings report, which is expected to be released before the bell on Friday.
Darden expects that acquisition and integration expenses will cost the company between $55 million and $60 million. But it also anticipates $5 million to $10 million in pre-tax synergies in the first year and an additional $15 million to $20 million in the second year.
The deal is expected to close in June if customary closing conditions are met.
Ruth’s CEO Cheryl Henry will stay on as president of Ruth’s Chris and report to Darden CEO Rick Cardenas.
Ruth’s shares spiked nearly 34% in premarket trading. Darden’s stock was flat.
As of Tuesday’s close, Darden’s stock had risen nearly 10% this year, giving it a market value of $18.4 billion. Ruth’s shares had increased 3% this year as of Tuesday, bringing its market value up to $525 million.