Roark Capital Will Acquire Buffalo Wild Wings

Roark Capital Group, the private equity company that owns Cinnabon and Arby’s, has apparently agreed to acquire Buffalo Wild Wings restaurant chain for the price of $2.4 billion, said officials from both companies earlier Tuesday morning.

Roark agreed to pay approximately $157 per share in cash for the restaurant operators based in Minneapolis, Minnesota. The prices offered by Roark will represent a 34% premium to the closing prices for Buffalo Wild Wings as of November 13, which was the last day before the initial bid by Roark was made public.

The bid made earlier of $150 a share implied a premium of 28% from the stock’s price as of the close of business on Friday November 10.

After the deal is agreed to and closes, Roark is reportedly planning to merge Arby’s and Buffalo Wild Wings, although each of the two brands would remain as distinct entities. It was also reported by the source that CEO of Arby’s Paul Brown would become the CEO of the new entity that would include the two restaurant chains.

Buffalo Wild Wings was going through a period of difficulty following a proxy fight that it lost to activist investor Marcato Capital Management back in June.

When the proxy fight was lost, longtime CEO at Buffalo Wild Wings Sally Smith made an announcement that she would be resigning.

Roark Capital holds several investments in the restaurant and food industry including restaurant chains Carvel, Auntie Anne’s and Carl’s Jr. In early 2017, Roark was unsuccessful in an attempt to acquire Popeye’s Louisiana Kitchen the chain of fried chicken restaurants, which was then sold to competitor Restaurant Brands International for the price of approximately $1.8 billion.

On Monday, Buffalo Wild Wings was downgraded by Deutsche Bank and UBS over the concerns that are related to the Roark Capital takeover bid.

While paying $2.4 billion, Roark will also assume the Buffalo Wild Wings debt. Brown said that Buffalo Wild Wings was one of the most successful and distinctive casual dining and entertainment restaurant companies in the U.S.

In addition, Brown added that Roark was excited to be welcoming the brand that has such a great heritage led by a team that is exceptionally talented and looked forward to leveraging combined strengths of the two organizations into transformative and differentiated multi-brand restaurant business.

Buffalo Wild Wings has over 1,250 locations in the U.S. and 9 other countries, while Arby’s has over 3,300 restaurants in seven countries.

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