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Darden To Take Rare Hospitality in $1.4B Deal

ATLANTA-In addition to its more than 300 restaurants, Rare Hospitality plans to open between 38 and 40 new ones this year.

By Melissa Kress | Updated on August 17, 2007

ATLANTA-With unanimous approval from both sides of the deal, Darden Restaurants is acquiring locally based Rare Hospitality in a $1.4-billion transaction. The deal, expected to close in October, will give Darden more than 300 of Rare’s restaurants with annual sales of $1 billion.

Under the agreement, Darden will purchase the locally based company for $38.15 per share–a figure that represents a 39% premium to Rare’s average closing stock price for the past 30 days. The $1.4-billion total price tag includes outstanding debt and capital lease obligations that Darden will assume when the deal closes.

Darden will use a $1.2-billion senior interim credit facility and a $700-million senior revolving credit facility to finance the all-cash deal. Bank of America is the lead arranger on the senior interim credit facility and the senior revolving credit facility. Lehman Brothers also advised Darden on the transaction.

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