Orlando, Fla. -- Darden Restaurants on Friday said it has reached an agreement to sell its struggling Red Lobster chain to private equity firm Golden Gate Capital for $2.1 billion.
"Red Lobster is exactly the type of company in which we seek to invest given its great brand profile and strong management team,” said Josh Olshansky, managing director at Golden Gate Capital. “We see significant opportunities for future growth by partnering with Kim Lopdrup and the management team to support the long-term success of Red Lobster."
Darden said it expects net cash proceeds of about $1.6 billion, of which about $1 billion would be used to retire debt. The remainder would be used to buy back up to $700 million of shares in fiscal 2015, according to Darden.
In December, Darden said it planned to spin off or sell the 705-restaurant Red Lobster division.