Darden Restaurant announced late Monday that it will buy Cheddar's Scratch Kitchen in cash for $165, a casual catering chain with 0. 78 billion restaurants in 28 states.
The company also announced revenue and sales that exceeded expectations.
Denton shares (DRI)
Rose 7% in the early trading of news and hit a new hightime high.
Cheddar's deal gave Darden another brand that was popular locally but did not have a national footprint.
Most of cheddar is located in Texas and southeast.
Cheddar pays attention to American food classics such as chicken
Steak, ribs, macaroni and cheese.
This is the first acquisition of Darton since the acquisition of the Yard House chain in 2012.
In 2014, Darton sold Red Lobster to a private equity firm.
In addition to the Olive Garden and the house in the yard, Darton also has chain stores in the Long Horn Steak House, Capital Grille, season 52, Bahamas breeze and Eddie V.
The good news for Darden is the latest shocking shift since the company was taken over by radical investor group Starboard in 2014.
Starboard successfully led a shareholder uprising.
CEO Clarence Otis resigned, and Gene Lee, then chief operating officer of the company, took over from him ---
Under the blessing of starboard
Related: The Olive Garden launched the latest fullyou-can-
Eat deal attacked Darden in a stern slide presentation detailing all culinary sins that investment companies believe will ruin the company and keep investors away, for example, too much sauce and a menu that deviates from Italian cuisineAmerican roots.
My colleague Cristina Alesci and I conducted our own taste test on 2014 after an attack on the company on starboard ---
We agreed to starboard.
We did not find our favorite Olive Garden food.
But since Starboard took over, the company is again in growth mode.
The investment was very successful and Starboard leader Jeffrey Smith decided last year to step down as chairman of the board on the grounds that the company had made progress in reversing the situation.
Sales in the Olive Garden have increased, mainly due to changes in the menu mix and rising prices.
One problem that the company still faces is that it is unable to significantly expand its customer base.
The chain's traffic fell slightly again in the quarter and also in the current fiscal year.
But Denton recently performed well in an environment that was tough for some other chain restaurants.
Many of the produce is less expensive, resulting in people taking advantage of cheaper groceries and dining more than eating outside.
As long as the Olive Garden continues to offer its famous bread sticks and its never-ending pasta pass, investors seem to be as happy with Darton's stock as the Olive Garden's supporters are with its food.
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