Roark Capital, the owner of dining establishments Arby’s and Buffalo Wild Wings, is edging close to an agreement to acquire the sandwich franchise Subway for approximately $9.6 billion, according to a Monday report.
Sources familiar with the situation stated that the deal might reach its conclusion within this week.
Subway has communicated that it has no intentions of providing additional public statements regarding the process until the transaction reaches its finalization.
Earlier this month, disclosed that private equity companies TDR Capital and Sycamore Partners were engaged in discussions about joining forces to pursue the acquisition of Subway. This move comes after Subway announced in February its consideration of selling its business.
During that time, Subway had set its sights on a deal surpassing $9 billion; however, there’s still uncertainty surrounding whether TDR and Sycamore can align with Subway’s price demands. Additionally, another consortium led by Roark Capital was also vying for the acquisition, according to the same sources.
Roark Capital’s Investments and Subway’s Growth
Roark Capital, a private equity company, specializes in investments within the realms of franchised consumer and business services sectors. Among its investments, Roark is notable for its stake in Inspire Brands, the parent company of well-known brands such as Arby’s, Baskin-Robbins, Buffalo Wild Wings, and Dunkin’, among others.
Established in 1965 by 17-year-old Fred DeLuca and family friend Peter Buck, Subway, operates an extensive network of approximately 37,000 restaurants across more than 100 countries.
Since its inception as “Pete’s Super Submarines” in Bridgeport, Connecticut, the company has remained under the ownership of its founding families.
During the initial six months of 2023, Subway experienced a notable rise of 9.3% in same-store sales within the North American region. This growth can be attributed to the company’s initiatives to refresh its menus, renovate its dining establishments, and enhance its marketing endeavors. These actions have effectively attracted a larger customer base, even in the midst of strong competitive pressures.
Conclusion
In the midst of negotiations, Roark Capital is poised to acquire Subway for around $9.6 billion, a potential deal expected to conclude soon. Subway’s growth remains notable, with a 9.3% rise in North American same-store sales during H1 2023, driven by menu enhancements, restaurant upgrades, and robust marketing efforts.
