Darden Restaurants has agreed to acquire Chuy's Holdings for approximately $605 million, adding a Tex-Mex restaurant chain to a portfolio that already includes Olive Garden, LongHorn Steakhouse, and others.

Darden announced that it would acquire all outstanding shares of Chuy’s for $37.50 per share. The price represents a 40% premium over Chuy’s volume-weighted 60-day average price.

Chuy's shares rose by more than 47% to $37.20 in after-hours trading. Darden's shares, on the other hand, fell by 0.9% to $146.

The deal, a pure cash transaction, comes a year after Darden's acquisition of Ruth's Hospitality Group, whose assets include Ruth's Chris Steak House, for 715 million US dollars.

Here is the heading translated to English:

"Rick Cardenas, CEO of Darden, said that Chuy’s is a differentiated brand that has performed well and has growth potential.

Chuy's, based in Austin, Texas, generated total revenue of over 450 million US dollars in the 12 months leading up to March 31 from its approximately 100 restaurants in 15 states. The company employs 7,400 people.

It will become part of a much larger company. Darden employs around 190,000 people in 1,900 restaurants, including the brands Yard House, The Capital Grille, and Bahama Breeze. In the last fiscal year, Darden generated revenue of approximately $11.4 billion.

Restaurants have gone through difficult times in recent years, initially due to the pandemic that affected their business, and then due to inflation that strained household budgets.

Darden stated last month that guests are increasingly concerned about inflation and the labor market, which is limiting their discretionary spending.

While other casual-dining chains like Applebee’s and Chili’s increasingly rely on promotions, Darden is taking a different approach. The Olive Garden chain is raising prices at a slower pace than overall restaurant inflation to demonstrate everyday value, rather than launching temporary promotions.

Both boards have approved the merger, which is expected to be completed in Darden's second fiscal quarter.