Notable Mergers and Acquisitions of the Day 07/13: (DRI) (PLFE) (KW) (LCC)
- After the market closed Thursday, Darden Restaurants, Inc. (NYSE: DRI) said it agreed to acquire Yard House USA, Inc. for $585 million in an all-cash transaction from private equity firm TSG Consumer Partners LLC, management and investors. The total transaction price of $585 million includes approximately $30 million of cash tax benefits that are expected to be realized by Darden in fiscal 2013 and fiscal 2014.
The brand will become part of Darden's Specialty Restaurant Group, which includes The Capital Grille, Bahama Breeze, Seasons 52 and Eddie V's. Including acquisition-related costs of approximately seven to ten cents per share, offset partially by Yard House's earnings from operations, the transaction is expected to be dilutive to Darden's diluted net earnings per share in fiscal 2013 by approximately three to five cents and accretive thereafter.
Darden expects to complete the transaction early in its Q213.
Goldman, Sachs & Co. is acting as exclusive financial advisor and Hunton & Williams LLP is acting as legal advisor to Darden. J.P. Morgan Securities LLC is acting as exclusive financial advisor and Sidley Austin LLP is acting as legal advisor to TSG Consumer Partners LLC and Yard House.
Darden revised its fiscal 2013 outlook to account for the impact of the transaction on sales and earnings. The Company still expects combined full-year U.S. same-restaurant sales growth in fiscal 2013 of approximately 1% to 2% for Red Lobster, Olive Garden and LongHorn Steakhouse, and continues to expect to open approximately 100 to 110 net new restaurants in fiscal 2013, exclusive of the Yard House transaction.
However, as a result of the transaction, the Company expects total sales growth of between 9% and 10% in fiscal 2013 and anticipates that diluted net earnings per share growth from continuing operations in fiscal 2013 will be in the range of 5% to 9%. As a result of the Yard House acquisition, the Company projects that share repurchase during fiscal 2013 will total approximately $50 million, which is down from the $200 million to $250 million of share repurchase previously projected.
- Presidential Life Corporation (Nasdaq: PLFE) and Athene Holding Ltd., a Bermuda-based holding company, today announced a definitive agreement for an Athene subsidiary to acquire Presidential Life for $14.00 per share in cash, representing an aggregate purchase price of approximately $415 million.
Under the terms of the agreement, Presidential Life, which markets and sells a variety of fixed annuity, life insurance and accident and health insurance products through its wholly owned subsidiary, Presidential Life Insurance Company, will be acquired by Athene’s wholly owned subsidiary, Athene Annuity & Life Assurance Company, a Delaware-domiciled insurer focused on retail fixed and index annuity sales and reinsurance.
- Kennedy Wilson (NYSE: KW) and its partners completed the acquisition of Stadium Gateway in Anaheim, CA for $56 million. The six-story, 272,826 RSF, Class A office building located at 1900 State College Boulevard increases Kennedy Wilson’s total office portfolio to 3.6 million square feet.
- US Airways Group (NYSE: LCC) is taking the potential acquisition of AMR Corp. (OTCBB: AAMRQ) very seriously.
According to bankruptcy court filings made late Thursday, US Airways is snatching up AMR debt, paying just 60 cents on the dollar. US Airways also noted it supports AMR Corp.'s request to draft a reorganization plan.
Holding onto AMR Corp.'s debt, US Airways is now leveraging the potential to force AMR into a merger should the bankrupt company fail to follow through on a plan to "seek alternatives."
US Airways is up about 1.4 percent in early trading Friday.
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