The Orlando owner of Olive Garden and other chain restaurants is buying Winter Park-based Ruth’s Hospitality Group for about $715 million.
Darden Restaurants revealed the all-cash deal Wednesday, saying it is paying $21.50 per share. Ruth’s stock price was at $16.03 per share Tuesday at market closing. The deal is expected to close in June. It has been unanimously approved by the boards of directors for both companies.
Ruth’s has 80 company-owned or operated Ruth’s Chris Steak House restaurants and 74 franchised locations worldwide.
Darden spokesman Rich Jeffers declined to answer questions from the Orlando Sentinel until after a company conference call scheduled for Thursday morning.
There will likely be some existing overlap between the two Central Florida companies, according to San Diego-based restaurant analyst John Gordon.
“In my opinion… there is no doubt that the Ruth’s Chris office in Winter Park will be eventually closed and it will be consolidated into the great Darden building,” Gordon said.
Darden has bought and consolidated other chains and has a template for how to do it properly, he added.
“Darden is smart enough and they know that they need Ruth’s Chris experienced people in the new organization,” Gordon said. “There will be some redundancies because, obviously, Darden has some of those same kinds of people.”
Examples of some departments that might have redundancies are finance, personnel and construction, Gordon said.
CEO Cheryl Henry is expected to stay on as president of Ruth’s Chris and report to Darden CEO Rick Cardenas.
“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,” Cardenas said in a news release. “ … 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.”
Darden already has 1,890 restaurants including Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V’s and The Capital Burger.
The company last acquired Cheddar’s Scratch Kitchen in 2017 for $780 million. Cheddar’s had 165 restaurants at the time of the deal.
“They made the determination that the value end, with Olive Garden and with Cheddar’s, is enough right now and that they would rather go with Ruth’s Chris, which even more strengthens the steak house end,” Gordon said.
Another benefit for Darden in the deal is Ruth’s Asia restaurants, giving the company more access to international operations, Gordon said.
Cardenas has been hinting at acquiring a restaurant chain since shortly after he became CEO, telling the Orlando Sentinel last year he would want a full-service restaurant able to make a “meaningful difference” in Darden’s future.
Ruth’s Chris started in 1965 in New Orleans and moved to Central Florida in 2005 after Hurricane Katrina devastated that Louisiana city.
The company first moved to Lake Mary before revealing in 2011 it was relocating its headquarters to Winter Park Village. Seminole County had put up $60,000 in tax incentives to land Ruth’s as part of a $300,000 package that also included money from the state.
Ruth’s also recently opened a new restaurant at Winter Park Village, moving its old eatery across the parking lot as the open-air shopping center undergoes a $50 million redevelopment.
“Our strategy and operating philosophy aligns well with Darden, and we have a strong cultural fit that should ensure a smooth transition,” Henry said in the release. “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.”