Money Matters - Simplified

Darden Restaurants to acquire Yard House chain for $585 million

Apart from a stylish and energetic environment and massive menu of pizzas, burger, tacos, steaks, salads, Yard House is known to offer a beer list averaging between 130 and 180 brews on tap.

Darden Restaurants, an Orlando based company that owns Red Lobster and Olive Garden among other chains has agreed to acquire the Irvine-based Yard House USA Inc. for $585 million in cash.

The all cash transaction with private equity firm TSG Consumer Partners LLC, management and investors is expected to close by November during Darden's fiscal second quarter.

After the acquisition, Yard House will become part of Darden’s more upscale Restaurant Group, which includes The Capital Grille, Bahama Breeze, Seasons 52 and Eddie V’s.

Through this deal Darden expects to generate revenue of $368 million in fiscal 2013 and anticipates that net earnings growth from continuing operations will be in the range of five to nine percent.

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 percent for years to come."

The all cash transaction with private equity firm TSG Consumer Partners LLC, management and investors is expected to close by November during Darden's fiscal second quarter.

The 39-unit Yard House restaurant chain
Yard House launched its first restaurant in California in the year 1996. Created by former Hawaii resident Steele Platt, along with co-founders Harald Herrmann and Carlito Jocson, the brand has 39 units across 13 states.

According to Darden executives, the Yard House chain has the potential to eventually expand to at least 150 to 200 locations in the U.S.

Apart from a stylish and energetic environment and massive menu of pizzas, burger, tacos, steaks, salads, Yard House is known to offer a beer list averaging between 130 and 180 brews on tap.

Clarence Otis said, “Steele, Harald and Carlito have created one of the most differentiated and exciting restaurant brands in America today, with average unit volumes and returns on capital that are among the highest in the industry."

“Guests in a number of different markets are responding to Yard House’s unique combination of handcrafted food, premium beers and other beverages, thoughtful soundtracks and elegantly designed restaurants. This combination has established Yard House as a great place for a wide range of occasions.”

Existing leadership to continue
The team of partners is expected to stay on with Darden and help with the day to day operations at Yard House.

Chief Executive Harald Herrmann will become president of Yard House and report to Gene Lee, president of Darden's specialty restaurants.

Harald Herrmann, President and Chief Executive Officer of Yard House USA stated, “This transaction offers a tremendous opportunity to begin the next chapter in Yard House’s high growth evolution to become a national brand."

“We’re excited about the opportunity, and that we and our team members will become a part of one of the world’s largest and most successful restaurant companies.”