The owner of Arby’s Restaurant Group has said it will buy drive-in chain Sonic Corp in a $2.3 billion transaction, including debt.
Inspire Brands, which also owns Buffalo Wild Wings and Rusty Taco, said on Tuesday that Sonic’s board of directors had unanimously approved the deal, which includes about $1.57 billion in cash.
‘Sonic is a highly differentiated brand and is an ideal fit for the Inspire family,’ said Inspire CEO Paul Brown in a statement.
‘We have tremendous respect for Sonic’s exceptional team of employees and franchise owners, who have built one of the industry’s most distinctive restaurant brands.’
The Sonic chain has about 3,500 locations in 44 states, and is known for burgers, quirky menu items and a wide variety of drinks, milkshakes and slushies
Inspire CEO Paul Brown (above) announced the deal on Tuesday, saying that the Sonic board of directors had already unanimously approved the buyout
Oklahoma City-based Sonic has about 3,500 locations in 44 states.
The iconic drive-in chain is known for its carhops on roller skates, burgers and wide selection of quirky slushies and sodas.
Inspire has offered Sonic shareholders $43.50 for each share held, a 19 per cent premium to the stock’s Monday close.
Sonic’s shares were trading just below the offer price at $43.30 in mid-day trading.
The deal, which is expected to close by the end of the year, will see Sonic taken private.
The parent company behind Arby’s believes that the new acquisition will diversify its holdings
Including the assumption of Sonic’s net debt, the deal is valued at about $2.3 billion, the companies said.
The deal values Sonic slightly higher than Shake Shack, worth $2.2 billion, and a little more than half the value of Wendy’s Co, which is worth $4.1 billion.
McDonald’s Corp remains the titan of fast food, with a market cap of $126.7 billion.
Inspire brands was formed by private equity firm Roark Capital as a holding company when Arby’s completed the acquisition of Buffalo Wild Wings earlier this year.
Roark bought a majority stake in Arby’s from Wendy’s Co in 2011 and purchased the remaining 12.3 per cent last month.