Darden Restaurants to Sell Red Lobster for $2.1 BillionDarden has announced an agreement its Red Lobster chain to Golden Gate Capital for $2.1 billion. The New York Times reports that the deal does not require shareholder approval. Darden owns several other restaurant chains, including Olive Garden, Longhorn Steakhouse and Bahama Breeze Island Grille. The Red Lobster and Olive Garden chains have been struggling. Darden says it plans to use the sale to focus on growing the Olive Garden brand.
Darden Chairman and CEO says, "By enabling us to bolster the Company's financial foundation and increase our focus on the Olive Garden brand renaissance program, we believe this agreement addresses key issues that our shareholders have raised, including the need to preserve the Company's dividend and regain momentum at Olive Garden."
Josh Olshansky, Managing Director at Golden Gate Capital, says in a statement, "Red Lobster is an exceptionally strong brand with an unparalleled market position in seafood casual dining. Red Lobster is exactly the type of company in which we seek to invest given its great brand profile and strong management team. We see significant opportunities for future growth by partnering with Kim Lopdrup and the management team to support the long-term success of Red Lobster."
Posted on May 16, 2014