Speculation that casual-dining giant Darden Restaurants Inc. will make an opportunistic acquisition has percolated since late last year, with securities analysts often identifying chains ripe for the picking, from BJ’s Restaurants to California Pizza Kitchen.

Another round of buyout bets began Wednesday, when Janney Capital Markets analyst Mark Kalinowski listed potential targets for Orlando, Fla.-based Darden to consider.

His top picks for Darden, which operates Olive Garden, Red Lobster, LongHorn Steakhouse and other chains, include Yard House Restaurants and the Bravo Brio Restaurant Group.

Kalinowski said there is a strong possibility that Darden will make a restaurant acquisition as early as this year. He noted, as he had in the past, that Darden may look for a complementary brand that fits into its Specialty Restaurant Group, which includes The Capital Grille, Bahama Breeze and Seasons 52. He also suggested Darden may seek out a concept that mimics its Italian and seafood prowess or a chain in the varied menu, bar-and-grill sector. Kalinowski said Darden is most likely to stay away from barbecue, especially after it bought and sold the Smokey Bones chain, as well as family-dining or steakhouse chains.

Through spokesman Rich Jeffers, Darden Restaurants said it does not comment on rumors or speculation.

Kalinowski’s notes on Yard House:

“We … believe that Darden might find itself interested in learning more about privately held Yard House. Yard House is currently in 10 states, and is known for having one of the largest selections of draft beer for any restaurant concept. The units are doing very large sales per box — we estimate approximately $8 million average unit volumes — and we view the concept as differentiated within the casual-dining space.”

Kalinowski’s notes on Bravo Brio Restaurant Group:

“Within higher-end Italian possibilities, Bravo Brio Restaurant Group seems to be the most likely possible acquisition, should Darden choose to go in this direction. Brio Tuscan Grille and Bravo! Cucina Italiana both operate in between casual dining and fine dining, with both operating at a higher price points than Olive Garden. The Brio Tuscan Grille concept has generated particularly impressive sales growth, with its total sales up by 17.2 percent during calendar 2010.”

Kalinowski also listed additional candidates he identified by looking at the Technomic Top 500 universe and narrowing the field to privately held or public brands with a market capitalization of under $750 million. The concepts must total between 20 units and 100 locations, have had at least 2-percent sales growth in 2010 and tally at least $75 million in U.S. systemwide sales.

Potential acquisition candidates:

Contact Sarah Lockyer at sarah.lockyer@penton.com.
Follow her on Twitter: @slockyerNRN