Florida-based company Darden Restaurants, Inc. recently acquired Cheddar’s Scratch Kitchen from Arlington. Darden’s is a giant in the restaurant industry, owning major chains such as Olive Garden, LongHorn Steakhouse and The Capital Grille. When a purchase like this is made, companies often have to sign purchase and sales agreements to ensure that details of the sale, such as the purchase price, type of transaction, payment terms, liabilities and other critical information is documented. The final agreement will be binding and will be critical if the two parties ever end up in court to handle a dispute.
Darden purchased Cheddar’s with an all-cash transaction from its stockholders. Private equity firms such as L Catterton and Oak Investment were involved. Darden’s will pay $780 million, plus $10 million to pay back equity holders for new restaurants that are already being created. The $10 million will also go towards taxes associated with the transaction. The transaction will be completed in 2017 during Darden’s fiscal fourth quarter.
Cheddar’s started in 1979 and now is in 165 locations in 28 states. A spokesperson for the company says that Cheddar’s will be moving to Orlando, Florida eventually. The chief executive of Cheddar’s will serve as president and report to Darden’s chief executive and president, Gene Lee.
Both companies are excited about the purchase and are looking forward to what’s to come. However, there are times when business dealings go sour and two major companies end up in court battling over contracts. Many business litigation claims stem from disputes among shareholders or breaches of contract that costs a company millions of dollars.
Source: Dallas News, “Olive Garden parent buying Cheddar’s chain for $780 million,” Karen Robinson-Jacobs, March 27, 2017