Arby's owner to acquire Buffalo Wild Wings for $2.4B

Marcus Newton
November 30, 2017

Meat-centric sandwich chain Arby's said Tuesday that it's buying Buffalo Wild Wings for about $2.4 billion, making it the latest casual restaurant chain to be taken private.

Arby's will pay $157 a share in Buffalo Wild Wings stock and will assume the company's debt. Goldman Sachs Group Inc. provided financial advice to Buffalo Wild Wings, while Minneapolis-based Faegre Baker Daniels LLP was its legal counsel.

Following the close of the transaction, Buffalo Wild Wings will be a privately held subsidiary of Arby's and will continue to operate as an independent brand. The per-share offer is 38 percent higher than Buffalo Wild Wings' 30-day average stock price as of November 13, the last trading day before speculation about the merger began.

Arby's is controlled by Roark Capital Group Inc., a private-equity firm that's portfolio also includes Jim 'N Nick's Bar-B-Q, CKE Restaurants (parent company of Carl's Jr. and Hardee's), Corner Bakery, FOCUS Brands (Auntie Anne's Pretzels, Carvel Ice Cream, Cinnabon, McAlister's Deli, Moe's Southwest Grill, and Schlotzsky's), Il Fornaio, Jimmy John's, Miller's Ale House, and Naf Naf Grille.

The agreement has been unanimously approved by both companies' boards of directors.

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"We are excited about this merger and confident Arby's represents an excellent partner for Buffalo Wild Wings", Smith, who has remained CEO while the company searched for a successor, said in a statement. The rebound at Arby's has come as diners turn away from so-called casual dining chains like Buffalo Wild Wings, where customers typically sit down and are served by waiters. The shares got a small boost in October when results for the fall quarter turned out better than expected and a large one two weeks ago when news emerged that McGuire was seeking a buyer. Buffalo Wild Wings posted adjusted earnings per share of $1.36.

Buffalo Wild Wings' stock climbed 6.5% in premarket trading.

A leading culprit has been chicken wing prices.

The activist shareholder, Mick McGuire of San Francisco-based Marcato Capital, for months told the company's shareholders he had a strategy to double or triple the company's value by 2021 and was in it for the long term.

Other reports by MaliBehiribAe

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