ORLANDO, Fla. — Months after announcing it was pondering the future of its troubled Red Lobster brand, Darden Restaurants has agreed to sell the casual-dining chain to Golden Gate Capital, a San Francisco-based private equity investment firm, for $2.1 billion.
The Orlando, Fla.-based company said it explored alternatives prior to the sale, including spinning off the operating company and separately selling its assets. “Over the past months, we have had extensive conversations with our shareholders about Darden and the company’s strategic direction. 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. At the same time, it provides Red Lobster and its dedicated employees and leadership team with a partner who has a strong track record in the industry and is as equally dedicated to Red Lobster’s success,” said Clarence Otis, chairman and CEO of Darden Restaurants.
After the sale is finalized, the company will dedicate $1 billion to pay down its debt. The sale is expected to close in the first quarter of 2015.