ATLANTA—Arby's Restaurant Group, majority owned by Roark Capital, will acquire casual dining chain Buffalo Wild Wings Inc. for $157 per share, the two companies said Tuesday. The merger deal is valued at $2.9 billion including the assumption of debt, and represents a 38% premium on the 30-day average stock price of BWW shares as of Nov. 13, the last trading day prior to media reports about a potential sale.
The privatization of BWW comes after a year-long campaign by activist investor Marcato Capital Management, which earlier this year won a proxy battle in a move to pressure the dining chain to improve operations. Marcato, which controls 6.4% of BWW's stock, has agreed to vote in favor of the merger.
“We are confident that the strength of our two industry-leading brands, under the sponsorship of Roark Capital—an experienced restaurant and food service investor—will enable us to capitalize on significant growth opportunities in the years ahead,” says BWW CEO Sally Smith. The longtime CEO announced this past spring that she would retire either by the end of this year or when a successor was found.
Adds Arby's CEO Paul Brown, who will serve in the same capacity for the merged entity, “Buffalo Wild Wings is one of the most distinctive and successful entertainment and casual dining restaurant companies in America. We are excited to welcome a brand with such a rich heritage, led by an exceptionally talented team.” BWW operates about 1,250 locations across 10 countries.
BWW will operate as an independent brand post-merger, and will be a privately-held subsidiary of Arby's. The deal is expected to close in the first quarter of 2018, pending approval by BWW shareholders.
In connection with the merger, Barclays is serving as financial advisor and White & Case LLP is serving as legal counsel to Arby's. Goldman Sachs is serving as BWW's financial advisor and Faegre Baker Daniels LLP is serving as its legal counsel.
The merger continues a spate of M&A activity in the restaurant sector that has continued throughout 2017. Earlier this month, Panera Bread agreed to acquire Au Bon Pain, after being acquired itself by Luxembourg-based JAB this past spring. Burger King announced in February that it would pay $1.8 billion for Popeyes Louisiana Kitchen.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
