Sure we're over-restauranted among the chains, but Roark clearly sees an opportunity when well-liked chains see a significant market dip.
— Jason Clampet
Roark agreed to pay $157 a share in cash for the Minneapolis-based restaurant operator, representing a 34 percent premium to the stock’s Nov. 13 closing price, the day before Roark’s opening bid of about $150 was reported. Roark will also take on Buffalo Wild Wings net debt, the companies said Tuesday.
The deal caps a tumultuous year for Buffalo Wild Wings, which lost a proxy fight with activist Marcato Capital Management in June. The battle caused longtime Chief Executive Officer Sally Smith to announce her resignation. The chain came under fire after a sales slump was exacerbated by higher prices for chicken wings.
Buffalo Wild Wings shares climbed as much as 6.8 percent in pre-market trading to $156.30. The stock had dropped 5.2 percent this year through Monday’s close.
Under the terms, Buffalo Wild Wings will become a closely held subsidiary of Arby’s and will continue to be operated as an independent brand, the companies said. Paul Brown, chief executive officer of Arby’s Restaurant Group, will serve in that role of the expanded company.
Funds advised by Marcato, which owns about 6.4 percent of Buffalo Wild Wings, have agreed to vote in favor of the acquisition, according to a statement.
Barclays served as financial adviser and White & Case LLP as legal counsel to Arby’s. Goldman Sachs Group Inc. provided financial advice to Buffalo Wild Wings, while Faegre Baker Daniels LLP was its legal counsel.
Roark Capital is a prominent player in the food industry, with investments in chains such as Carl’s Jr., Carvel and Auntie Anne’s. The private equity firm earlier this year backed an unsuccessful attempt to buy fried-chicken chain Popeyes Louisiana Kitchen Inc., which instead was sold to Restaurant Brands International Inc. for about $1.8 billion.
©2017 Bloomberg L.P.