Darden Restaurants to Acquire Ruth's Hospitality Group in $715 Million Transaction

May 3, 2023

ORLANDO, Fla., May 3, 2023 /PRNewswire/ -- Darden Restaurants, Inc. ("Darden") (NYSE:DRI) and Ruth's Hospitality Group, Inc. ("Ruth's") (Nasdaq: RUTH), jointly announced today that they have entered into a definitive merger agreement pursuant to which Darden will commence a tender offer to acquire all of the outstanding shares of Ruth's for $21.50 per share, in an all-cash transaction with an equity value of approximately $715 million. Ruth's, owner and operator of Ruth's Chris Steak House ("Ruth's Chris"), will complement Darden's portfolio of differentiated brands which currently includes Olive Garden, LongHorn Steakhouse, Yard House, Cheddar's Scratch Kitchen, The Capital Grille, Seasons 52, Bahama Breeze and Eddie V's.

Ruth's Chris was founded in 1965 in New Orleans, Louisiana, by Ruth Fertel and features signature USDA Prime steaks served sizzling on 500-degree plates, New Orleans-inspired sides and an award-winning wine list. Ruth's Chris has 154 locations around the globe, including 80 company-owned or -operated restaurants and 74 franchised restaurants, generating systemwide sales of over $860 million, total revenues over $500 million, and average annual restaurant volumes for company-owned or -operated locations of $6.2 million in Ruth's fiscal year 2022.

"Ruth's Chris is a strong and distinctive brand in the fine dining segment with an impressive history of delivering elevated dining experiences to their loyal guests," said Darden President and CEO Rick Cardenas. "It fits the criteria we have for adding a brand to our portfolio and supports our winning strategy. Ruth's Chris is a great complement to our portfolio of brands, and I'm pleased to welcome their nearly 5,000 team members to Darden."

Cheryl Henry, President, CEO and Chairperson of Ruth's, stated, "We are excited about the opportunity to join the Darden family. Our strategy and operating philosophy aligns well with Darden, and we have a strong cultural fit that should ensure a smooth transition. This transaction will also provide more opportunities for our team members to develop in their careers as we continue to grow our 57-year-old iconic brand."


  • Darden has agreed to acquire Ruth's for $21.50 per share, with a total transaction equity value of approximately $715 million, representing a 34% premium to the May 2 closing price and a 32% premium to the 30-day volume weighted average price.
  • Purchase price represents a 9.4x implied multiple of Ruth's fiscal year 2022 Transaction Adjusted EBITDA.*
  • Darden expects pre-tax synergies of between $5 and $10 million within the first year, and between $15 and $20 million in the second year.
  • Total acquisition and integration-related expenses are expected to be approximately $55 to $60 million.
  • Expected to be accretive to Darden's diluted net earnings per share in fiscal year 2024 by approximately 10 to 12 cents, excluding acquisition and integration-related expenses.
  • Transaction is expected to be completed in June, subject to satisfaction of customary closing conditions.
  • The transaction has been unanimously approved by the boards of directors of both Darden and Ruth's.
  • Cheryl Henry will continue to lead as President of Ruth's Chris and will report to Rick Cardenas.

*  See the "Non-GAAP Information" below for more details, including Darden's definition of Transaction Adjusted EBITDA and a reconciliation to Ruth's Net Income.

Summary of the Transaction

Under the terms of the merger agreement, a wholly-owned subsidiary of Darden ("Merger Sub") will commence a tender offer to acquire all of the outstanding shares of Ruth's for $21.50 per share in cash. This represents a premium of approximately 34% to Ruth's closing stock price on May 2, 2023 and a premium of approximately 32% per share to Ruth's 30-day volume-weighted average price. Ruth's board of directors unanimously recommends that Ruth's stockholders tender their shares in the tender offer. Additionally, all of Ruth's directors and executive officers have (subject to certain terms and conditions) agreed to tender their shares, representing approximately 4.4% of Ruth's outstanding common stock, in the tender offer.

Darden has sufficient liquidity to complete the all-cash transaction without obtaining additional financing. Darden expects to continue to maintain a strong balance sheet and have sufficient capital to achieve its stated capital allocation priorities of maintaining existing restaurants, growing new restaurants and returning capital to shareholders through dividends and strategic share repurchases.

The closing of the tender offer will be subject to certain conditions set forth in the merger agreement, including the tender of shares representing at least a majority of the total number of Ruth's outstanding shares, the expiration or termination of the applicable waiting period under the HSR Act and other customary conditions. Upon the successful completion of the tender offer, Darden will acquire all remaining shares not tendered in the tender offer through a second-step merger at the same price per share.

Hunton Andrews Kurth LLP is acting as legal advisor to Darden. Jefferies LLC is acting as exclusive financial advisor, and Kirkland & Ellis LLP is acting as legal advisor to Ruth's.

Investor Conference Call
Darden will host a conference call to discuss the transaction on Thursday, May 4, 2023, at 8:30 am ET. To listen to the call live, please go to https://dealroadshow.finsight.com/e/DARDEN23 at least fifteen minutes early to register, download, and install any necessary audio software. Prior to the call, a slide presentation will be posted on the Investor Relations section of Darden's website at:www.darden.com. For those who cannot access the Internet, please dial 1-800-630-4611 and provide the conference passcode 71522. For those who cannot listen to the live broadcast, a replay will be available on the Investor Relations section of Darden's website at:www.darden.com shortly after the call.

In connection with the transaction, Ruth's intends to cancel its first quarter 2023 earnings conference call, currently scheduled for Friday, May 5, 2023 at 8:30 a.m.

About Darden
Darden is a restaurant company featuring a portfolio of differentiated brands that include Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze and Eddie V's. For more information, please visit www.darden.com.

About Ruth's Hospitality Group, Inc.
Ruth's Hospitality Group, Inc., headquartered in Winter Park, Florida, is the largest fine dining steakhouse company in the U.S. as measured by the total number of Company-owned and franchisee-owned restaurants, with more than 150 Ruth's Chris Steak House locations worldwide specializing in USDA Prime grade steaks served in Ruth's Chris' signature fashion – "sizzling." For more information, please visit www.rhgi.com.

Additional Information about the Tender Offer and Where to Find It

The tender offer described above has not yet commenced. This communication is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell any securities, nor is it a substitute for the tender offer materials that Darden and Merger Sub will file with the United States Securities and Exchange Commission (the "SEC") upon commencement of the tender offer. A solicitation and offer to buy outstanding shares of Ruth's Hospitality Group, Inc. (the "Company" or "Ruth's") common stock will only be made pursuant to the tender offer materials that Darden and Merger Sub intend to file with the SEC. At the time the tender offer is commenced, Darden and Merger Sub will file a tender offer statement on Schedule TO, and Ruth's will file a solicitation/recommendation statement on Schedule 14D-9 (the "Solicitation/Recommendation Statement") with the SEC with respect to the tender offer.


The tender offer materials (including the Offer to Purchase and the related Letter of Transmittal), as well as the Solicitation/Recommendation Statement, will be made available to all investors and stockholders of Ruth's at no expense to them at the Investor Relations section of Darden's website at www.darden.com and under the "SEC Filings" section of the Company's website at www.rhgi.com/investors, and (once they become available) will be mailed to the stockholders of Ruth's free of charge. The information contained in, or that can be accessed through, Darden's website or the Company's website is not a part of, or incorporated by reference in, this press release. The tender offer materials (including the Offer to Purchase and the related Letter of Transmittal), as well as the Solicitation/Recommendation Statement, will also be made available for free on the SEC's website at www.sec.gov. In addition to the Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents, as well as the Solicitation/Recommendation Statement, Darden and Ruth's file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read any reports, statements or other information filed by Darden or Ruth's with the SEC for free on the SEC's website at www.sec.gov, or at the Investor Relations section of Darden's website at www.darden.com and under the "SEC Filings" section of the Company's website at www.rhgi.com/investors.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements either contained in or incorporated by reference into this document, other than purely historical information, including statements relating to the acquisition of the Company by Darden and any statements relating to the Company's business and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements." These forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as "believes," "plans," "anticipates," "projects," "estimates," "expects," "intends," "strategy," "future," "opportunity," "may," "will," "should," "could," "potential," or similar expressions. Forward-looking statements are based on management's current expectations and beliefs, as well as a number of assumptions, estimates and projections concerning future events and do not constitute guarantees of future performance. These statements are subject to risks, uncertainties, changes in circumstances, assumptions and other important factors, many of which are outside management's control, that could cause actual results to differ materially from the results discussed in the forward-looking statements.

Such forward-looking statements include those relating to the ability to complete, and the timing of completion of, the transactions contemplated by the merger agreement, including the parties' ability to satisfy the conditions to the consummation of the tender offer and the other conditions set forth in the merger agreement and the possibility of any termination of the merger agreement. Actual results may differ materially from current expectations because of numerous risks and uncertainties including, among others: (i) the risk that the proposed transaction may not be completed in a timely manner or at all; (ii) uncertainty surrounding the number of shares of the Company's common stock that will be tendered in the tender offer; (iii) the risk of legal proceedings that may be or have been instituted related to the merger agreement, which may result in significant costs of defense, indemnification and liability; (iv) the possibility that competing offers or acquisition proposals for the Company will be made; (v) the possibility that any or all of the various conditions to the consummation of the tender offer or the merger may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the tender offer or the merger; (vi) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; (vii) the effects of disruption from the transactions on the Company's business and the fact that the announcement and pendency of the transactions may make it more difficult to establish or maintain relationships with employees and business partners; (viii) Darden's ability to realize the synergies contemplated by the proposed transaction and integrate the business of the Company; (ix) reductions in the availability of, or increases in the cost of, USDA Prime grade beef, fish and other food items; (x) changes in economic conditions, including inflation, increasing interest rates, higher unemployment, slowing growth or recession; (xi) reductions in consumer discretionary income and general competition in the restaurant industry; (xii) the effect of shortages or increases in labor costs, state or local government regulations related to the sale or preparation of food, the sale of alcoholic beverages and the opening of new restaurants; (xiii) risks in the markets where the Company's restaurants are located; and (xiv) the inability to successfully integrate franchisee acquisitions into the Company's business operations, economic, regulatory and other limitations on the Company's ability to pursue new restaurant openings and other organic growth opportunities. The risks and uncertainties may be impacted by the COVID-19 pandemic (including supply chain constraints, labor shortages and inflationary pressure). The foregoing factors should be read in conjunction with the risks and cautionary statements discussed or identified in Darden's and the Company's respective public filings with the SEC from time to time, including their respective Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Darden's and the Company's stockholders and investors are cautioned not to unduly rely on these forward-looking statements. The forward-looking statements speak only as of the date hereof and, other than as required by applicable law, Darden, Merger Sub and the Company expressly disclaim any intent or obligation to update or revise publicly these forward-looking information or statements.

Non-GAAP Information

The information in this press release includes financial information determined by methods other than in accordance with U.S. generally accepted accounting principles ("GAAP"), including Transaction Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization). Darden calculates Ruth's Transaction Adjusted EBITDA as Ruth's net income plus interest expense, net, income tax expense, depreciation and amortization expenses, loss on legal settlement, loss on lease modifications and loss on impairment and restaurant closure costs. Darden calculates Ruth's Transaction Adjusted EBITDA consistent with Darden's methodologies to improve Darden's ability to assess Ruth's performance in relation to its own. Darden and Ruth's believe that the presentation of Transaction Adjusted EBITDA for Ruth's provides useful supplemental information that is essential to a proper understanding of the operating results of Ruth's businesses. This non-GAAP performance measure should not be viewed as a substitute for operating results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be similarly named and presented by other companies, including Ruth's calculation of Adjusted EBITDA. A reconciliation of Transaction Adjusted EBITDA to Net Income for Ruth's is included below in this release.

Ruth's Hospitality Group, Inc.

Reconciliation of Net Income to Non-GAAP Transaction Adjusted

($ Thousands)

52 Weeks Ended
December 25, 2022

GAAP Net Income


Interest expense, net


Income tax expense


Depreciation and amortization expenses




Loss on legal settlement


Loss on lease modifications


Loss on impairment and restaurant closure costs


Non-GAAP Transaction Adjusted EBITDA



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SOURCE Darden Restaurants, Inc.: Financial