Darden Restaurants, Inc. · NYSE:DRI
Darden Restaurants — Merger or Acquisition (May 2014)
15 slides from Darden Restaurants's merger presentation, May 16, 2014
Slide 1: Sale of Red Lobster
Sale of Red Lobster SPRING 2014
Slide 2: Forward-Looking Statement
Forward-Looking Statement During the course of this presentation, Darden Restaurants’ officers and employees may make forward-looking statements concerning the Company’s expectations, goals or objectives. Forward-looking statements in this communication regarding our expected earnings per share and
Slide 3: Important Additional Information
Important Additional Information The Company, its directors and certain of its executive officers are participants in the solicitation of proxies from stockholders in connection with the upcoming special meeting of the Company’s stockholders. In connection with the special meeting, the Company inten
Slide 4: Summary Overview
Summary Overview • Darden announced that it has entered into a definitive agreement to sell its Red Lobster business and related assets to Golden Gate Capital for $2.113bn in cash • The agreement is the culmination of a robust process to maximize the value potential of a sale or spin-off of Red Lobs
Slide 5: Key Details of the Transaction
Key Details of the Transaction • Total consideration of $2.1bn on a debt- and cash-free basis • Purchase multiple of approximately 9x April LTM EBITDA Transaction Overview • Expected to close in the first quarter of FY2015 • Darden expects to receive net cash proceeds of approximately $1.6bn after t
Slide 6: Robust Process to Maximize Value
Robust Process to Maximize Value WE RAN A BROAD MULTI-TRACK PROCESS WITH FINANCIAL, STRATEGIC AND REAL ESTATE BUYER PARTICIPATION TO MAXIMIZE THE VALUE OF RED LOBSTER • Beginning in early 2013, the Board undertook an extensive review of various strategic, operational and financial alternatives to ad
Slide 7: Delivering on Our Previously Communicated Objectives
Delivering on Our Previously Communicated Objectives Achieved by the Objectives for Darden Red Lobster Sale Transform Darden’s restaurant portfolio into two independent companies that can each focus on separate and distinct opportunities to maximize shareholder value Allow “New Darden” and “New Re
Slide 8: Review of Transaction Rationale
Review of Transaction Rationale What We Previously Said We Expect to Accomplish How the Transaction Achieves this Objective with this Transaction Higher and more consistent sales and earnings Darden, excluding Red Lobster, is expected to have higher growth driven by expanding customer base and sales
Slide 9: Update on Recent Red Lobster Performance
Update on Recent Red Lobster Performance RED LOBSTER SAME-RESTAURANT SALES HAVE LAGGED THE INDUSTRY 7.1% 2.0% 1.3% 0.4% Red Lobster (0.9)% (1.7)% (2.8)% (3.6)% (4.0)% (4.5)% (4.3)% (4.6)% (4.5)% (5.3)% (5.2)% (7.0)% (7.1)% (6.6)% (7.0)% (7.5)% (7.6)% (10.2)% (12.2)% 1.8% 1.6% 1.8% 2.2% 1.7% 0.9% Kna
Slide 10: Overview of Historical Financial Performance
Overview of Historical Financial Performance Darden excl. Red Lobster Red Lobster $ 6.2 $ 5.9 $ 5.3 $ 5.0 Revenue & % Growth $ 4.6 ($ in billions) $ 2.5 $ 2.5 $ 2.7 $ 2.6 $ 2.5 $ 2.5 FY10 FY11 FY12¹ FY13 Q3 LTM FY10 FY11 FY12 FY13 Q3 LTM LTM² % Growth 1% 8% 7% 11 % 14 % % Growth (5)% 1% 6% (2)% (4)%
Slide 11: New Darden: Focused on Core Concepts, Better Positioned for Success
New Darden: Focused on Core Concepts, Better Positioned for Success Sales Profile ($ in billions) Unit Information¹ Key Highlights • #1 Italian full service dining concept in the U.S. $ 3.7 $ 3.7 • Units: 836 • Among the largest full service dining restaurant chains in the $ 3.6 U.S. • AUV: $4.4mm $
Slide 12: Return of Capital Will Continue to be a Priority
Return of Capital Will Continue to be a Priority; Nearly $4 Billion Returned to Shareholders over the Past Decade 2004-2013 Cumulative Capital Returns 2004-2013 Cumulative Share Repurchase $ 2.6bn $ 599 2004-2013 Cumulative Dividends Paid $ 1.2bn $ 561 2004-2013 Avg. Annual Capital Returned as % of
Slide 13: Key Priorities for Darden Going Forward
Key Priorities for Darden Going Forward 1 Continue to execute our comprehensive Brand Renaissance Plan at Olive Garden, building on progress simplifying operations to enhance food quality and taste to improve the guest experience 2 Continue to develop LongHorn with a focus on leveraging national ca
Slide 14: Special Shareholder Meeting Considerations
Special Shareholder Meeting Considerations • On December 19, 2013 Darden announced the Red Lobster process and garnered interest from numerous financial, strategic and real estate buyers • Following Starboard’s announcement that it would seek a special shareholder meeting regarding the Red Lobster s
Slide 15: Nourish & Delight Everyone We Serve
NOURISH & DELIGHT Everyone We Serve.
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