WASHINGTON (dpa-AFX) - Darden Restaurants Inc. (DRI) Thursday said it agreed to acquire Yard House USA Inc. from private equity firm TSG Consumer Partners LLC for $585 million in cash. The company expects to complete the deal in its fiscal second quarter.
The acquisition price of $585 million includes about $30 million of cash tax benefits that are expected to be realized by Darden in fiscal 2013 and fiscal 2014.
Darden said the brand will become part of its Specialty Restaurant Group, which includes The Capital Grille, Bahama Breeze, Seasons 52 and Eddie V's.
Including acquisition-related costs of approximately seven to ten cents per share, offset partially by Yard House operating earnings, Darden expect the acquisition to be dilutive to net earnings in fiscal 2013 by about $0.03 to $0.05 per share and accretive thereafter.
Yard House, which launched its first restaurant in 1996, currently has 39 restaurants across 13 states.
Darden Chief Executive Clarence Otis said, 'With this addition, Darden's Specialty Restaurant Group will have nearly $1 billion in annual sales and be even better positioned to sustain annual sales growth of 15% to 20% for years to come.'
As a result of the transaction, the company expects total sales growth of between 9 and 10 percent in fiscal 2013 and anticipates that net earnings growth from continuing operations in fiscal 2013 will be in the range of 5 to 9 percent.
Previously, Darden expected net earnings to grow in a range of 8 to 12 percent over fiscal 2012, on projected sales growth of 6 to 7 percent.
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