Darden Restaurants To Sell Red Lobster Business For $2.1 Bln - Quick Facts

(RTTNews) - Darden Restaurants Inc. (DRI) has agreed to sell Red Lobster business and certain other related assets and assumed liabilities to Golden Gate Capital for $2.1 billion cash.

Darden expects nearly $1.6 billion net cash proceeds, after tax and transaction costs, of which around $1.0 billion would be used to retire outstanding debt. The final net proceeds of about $500 million - $600 million would be deployed for a new share buyback program of up to $700 million in fiscal 2015. Further to strengthening the firm's credit metrics, with the lower debt levels and reduced outstanding share count, Darden expects to maintain its current quarterly dividend of $0.55 per share, or $2.20 annually.

Today's agreement is the culmination of a robust process to enhance the value potential of a sale or spin-off of Red Lobster and its real estate assets.

Under its strategic action plan, Darden has significantly reduced operating support costs, reflecting prior announced savings of at least $60 million annually beginning in fiscal 2015 and additional savings identified during its work to separate Red Lobster.

Darden expects the Red Lobster business sale to close in the first fiscal quarter of 2015.