Landry's buys Del Frisco's from L Catterton

Dive Brief:

L Catterton completed its acquisition of Del Frisco's Restaurant Group, purchasing all outstanding shares for $650 million. The public restaurant group has been removed from the stock market, according to a press release.
The private equity firm has also agreed to sell Del Frisco's Double Eagle Steakhouse and Del Frisco's Grille to Landry’s for an undisclosed amount.
Barcelona Wine Bar and bartaco will remain under L Catterton's ownership and operate as two separate brands.

Dive Insight:

These acquisitions top off a whirlwind year for Del Frisco's. It acquired Barteca Restaurant Group in June 2018 for $325 million, which quickly sparked backlash from investors, who called it "ill-conceived." A few months later, the company started a strategic review, which resulted in the now closed acquisition by L Catterton.

L Catterton's move to break up the restaurant group is part of a growing trend among struggling restaurant groups to divest and raise capital while also focusing on a more central, core business operation. Bloomin' Brands is under pressure by an activist investor to sell itself entirely or sell off its holdings while keeping Outback, its biggest and strongest brand. Jack in the Box sold Qdoba in 2018 for $305 million as part of its move toward an asset-light business model. Wendy’s sold its 12.3% stake in Arby’s to Inspire Brands for $450 million last summer, opening up capital for future growth.

It also makes sense that L Catterton would keep Barcelona and bartaco, which were the only two brands to grow both same-store sales and customer counts during the second quarter ending June 25. While Barcelona and bartaco grew 2.4% and 5.5%, respectively, Double Eagle and Del Frisco's Grille decreased sales by 1.5% and 0.6%, respectively. The company previously said these brands would be run alongside its growing brands, which include Uncle Julio's, a likeminded casual Mexican food chain.

Landry's purchase of the two Del Frisco's brands doesn't really come as a surprise. It had been one of a handful of rumored buyers for Del Frisco's earlier this year. The two steak brands are also going to a company that has expertise in the segment and fits within Landry's existing portfolio, which include Mastro's, Morton's, Vic and Anthony's, Strip House and Brenner's, according to a press release. With so much expertise in the steakhouse space, it could help breath new life into the brand.