On Wednesday, Darden Restaurants announced that it will acquire Ruth’s Hospitality Group, the parent company of Ruth’s Chris Steak House, for $715 million in an all-cash transaction, valuing Ruth’s at $21.50 per share.

Ruth’s Chris Steak House has over 150 locations worldwide and generated $505.9 million in revenue in 2022. The deal is expected to close in June, subject to customary closing conditions.

Following the news, Ruth’s shares surged by nearly 34% in premarket trading, while Darden’s stock remained unchanged.

Ruth’s will join Darden’s fine-dining portfolio, which already includes The Capital Grille and Eddie V’s. In Darden’s most recent quarter, its fine-dining restaurants reported same-store sales growth of 11.7%, with the segment’s average weekly sales more than doubling compared to pre-pandemic levels.

The acquisition is Darden’s first in six years, with its last purchase being Cheddar’s Scratch Kitchen in 2017 for $780 million.

Darden CEO Rick Cardenas had previously indicated in January that the company was looking to add a 10th chain to its portfolio, provided the price was right.

Darden expects to incur acquisition and integration expenses of between $55 million and $60 million, but also anticipates between $5 million and $10 million in pretax synergies in the first year and an additional $15 million to $20 million in the second year. Ruth’s Chris Steak House CEO Cheryl Henry will stay on as president of Ruth’s Chris and report to Cardenas.

The deal marks a break in the recent drought of restaurant deal-making, with rising interest rates making acquisitions more expensive. Many restaurant giants have instead focused on turning around their underperforming chains and expanding their newer ones.

The upcoming sale of Subway, with an asking price of at least $10 billion, is expected to be the next major deal in the industry.

HUB24 Limited to acquire myprosperity for $40 million

JM has sold Diagnostic Services business to Sullivan Street Partners for £55 million