Rare Hospitality ( RARE) surged 35% late Thursday after the steakhouse chain agreed to a $1.2 billion buyout by Darden Restaurants ( DRI).

Shareholders of Atlanta-based Rare will get $38.15 a share in cash from Orlando, Fla.-based Darden, which operates the Red Lobster and Olive Garden chains.

Rare operates 287 LongHorn Steakhouse restaurants and 28 Capital Grille restaurants. It posted sales of $987 million last year.

Darden will utilize a $1.2 billion senior interim credit facility and a $700 million senior revolving credit facility to finance the transaction. Bank of America is the lead arranger on the senior interim credit facility and the senior revolving credit facility.

Rare rose $9.49 late Thursday to $37.

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