Subway sold to Roark Capital for $9.6 billion
The deal with the private equity player ended over five decades of family ownership of the sandwich chain.
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NEW YORK: Atlanta- based private equity firm Roark Capital is to acquire the sandwich chain, Subway, in a deal worth over $9 billion, ending a long-drawn auction that saw several bids from buyout firms, as per an agency report. The deal will make Roark Capital, which has $37 billion assets under management, one of the world’s largest restaurant operators.
It controls Inspire Brands, the owner of restaurant chains including Jimmy John’s, Arby’s, Baskin-Robbins and Buffalo Wild Wings. Subway on Thursday confirmed it has entered into a definitive agreement to be acquired by affiliates of Roark Capital, for an undisclosed price. However, the report, citing sources, pegged the sale to be $9.6 billion, after a competitive bidding process from rivals such as Sycamore Partners and TDR Capital.
“This transaction reflects Subway’s long-term growth potential, and the substantial value of our brand and our franchisees around the world,” said John Chidsey, CEO of Subway. “Subway has a bright future with Roark, and we are committed to continuing to focus on a win-win-win approach for our franchisees, our guests and our employees.”
The transaction is a major milestone in Subway’s multi-year transformation journey, combining Subway’s global presence and brand strength with Roark’s deep expertise in restaurant and franchise business models. Roark focuses on investments in consumer and business service companies, with a specialization in franchise and franchise-like businesses, and prides itself on being a trusted partner for management and business owners.
The transaction comes on the heels of Subway announcing its 10th consecutive quarter of positive same store sales. The company will continue to execute its strategy with a focus on sales growth, menu innovation, modernisation of restaurants, overall guest experience improvements, and international expansion.
JP Morgan is serving as financial advisor and Sullivan & Cromwell LLP is serving as legal counsel to Subway. Timing is subject to regulatory approvals and customary closing conditions. As one of the world’s largest quick service restaurant brands, Subway serves freshly made-to-order sandwiches, wraps, salads and bowls to millions of guests, across more than 100 countries in nearly 37,000 restaurants every day.
The company saw a 9.85 per cent increase in same-store sales in the first half of 2023. Its 12-month earnings before interest, taxes, depreciation and amortisation are around $800 million, as per an agency report.
