Chuy’s Acquired by Darden Restaurants Group

A national restaurant group that operates brands like Olive Garden and LongHorn Steakhouse acquired an Austin-based Tex-Mex restaurant chain this month. Darden Restaurants acquired Chuy’s on July 17.

As part of the financial transaction, Darden paid $37.50 per share of the company in cash. That equates to what the press release describes as an “enterprise value of approximately $605 million.”

Chuy’s co-founders Mike Young (d. 2023) and John Zapp opened the restaurant in Austin in 1982, taking over what had been a vacant barbecue restaurant space on Barton Springs Road. It became known for its Tex-Mex fare like enchiladas, creamy jalapeno dip, and margaritas, as well as its kitschy decor and ambiance (like an Elvis Presley shrine). They opened additional locations in Austin and Texas.

In 2006, Young and Zapp sold a majority stake in the company to private equity firm Goode Partners. After that, the chain expanded out of state, opening its first location in Franklin, Tennessee, in 2009. That expansion continued across the country. In 2012, the company went public and offered shares. Today, it has locations in 15 states. It recently opened its latest location in Austin, in Mueller, in April.

Young and Zapp also ran Austin Southwestern restaurant Shady Grove, also in Barton Springs, from 1992 to 2020. They also opened Hawaiian and Tex-Mex restaurant Hula Hut in 1993 with business partner Duffy Oyster, but sold their shares in 2009. Young left the Chuy’s board in 2017, and Zapp resigned from the board in 2018 after being accused of assault and domestic violence, according to Austin Business Journal.

Darden oversees a number of national restaurant chains. These include the Italian chain Olive Garden, LongHorn Steakhouse, the sports bar chain Yard House, Ruth’s Chris Steak House, Cheddar’s Scratch Kitchen (which is actually based in Irving, Texas), the fine dining chain Capital Grille, the steakhouse and wine bar chain Seasons 52, the seafood chain Eddie’s V’s, and the Caribbean restaurant chain Bahama Breeze.