You can be on Entrepreneur’s cover!

Done Deal: Red Lobster Restaurant Chain Sold for $2.1 Billion Golden Gate Capital, a private equity firm with experience in the restaurant industry, picks up the casual dining seafood chain from Darden Restaurants, Inc.

By Laura Entis

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Today marks a new chapter for Red Lobster, the struggling seafood chain. Orlando, Fla.-based Darden Restaurants, Inc. has announced that it will sell Red Lobster to the private equity firm Golden Gate Capital in a $2.1 billion cash deal.

Darden, which also owns Olive Garden, LongHorn Steakhouse, Capital Grille and a number of other chains, said in December that it planned to sell Red Lobster, citing disappointing sales.

The Red Lobster deal is expected to close by the summer of 2015, Darden says.

Activist investors, most notably hedge fund Starboard Value LP, have challenged Darden's strategy, arguing that the restaurateur should instead try and improve business through cost reduction and a separation between its struggling mainstream casual dining restaurants -- including Red Lobster and Olive Garden -- and its financially healthy high-end restaurants, such as Capital Grille.

Earlier this week, Starboard Value warned Darden not to sell Red Lobster before a meeting with shareholders was called to discuss the sale. That meeting has yet to be scheduled.

Related: Everything Seems to Be Getting Worse for Company Behind Red Lobster, Olive Garden

"While we can see how a Red Lobster separation could be convenient and beneficial for management, this could be the absolute worst time to be selling Red Lobster," Starboard Value Managing Member Jeffrey Smith wrote in a letter to Darden's board of directors on Wednesday. Like Red Lobster, Olive Garden has been steadily underperforming in recent years.

With the sale of Red Lobster, Darden argues it can now focus on rejuvenating the Olive Garden brand. The company has already made various modifications to the Italian chain -- including a revamped menu and a redesigned logo -- to lure back customers.

"We believe this agreement addresses key issues that our shareholders have raised, including the need to preserve the company's dividend and regain momentum at Olive Garden," Clarence Otis, Darden's chief executive, said in a statement.

Golden Gate Capital is no stranger to the restaurant business. The San Francisco-based private equity firm has holdings in California Pizza Kitchen, and On the Border, a casual dining Mexican chain. It sold Romano's Macaroni Grill last year for $55 million.

Related: Olive Garden Undergoes 'Brand Renaissance' as Investors' Criticism Intensifies

Laura Entis is a reporter for Fortune.com's Venture section.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Growing a Business

How to Leverage Business Awards to Foster Innovation, Build Your Brand and Retain Top Talent

Awards validate a company's efforts in innovation and corporate responsibility but also enhance its reputation, attract talent and open doors to new partnerships and customer segments.

Business News

Nike Responds to Criticism Over U.S. Women's Olympic Uniforms: 'Everything's Showing'

The company is the official outfitter for the U.S. Olympic track and field athletes.

Growing a Business

Top Brands Are Flocking to Newsletter Advertising — Here Are 11 Reasons Why You Should Do the Same.

An explanation of the current market trend of brands turning to newsletter advertising as a primary channel in their marketing campaigns.

Growing a Business

5 Entrepreneurial Mindsets That Drive Success

Here are the mindsets shared by the most successful entrepreneurs.