Arby's acquires Buffalo Wild Wings in nearly $3 billion cash deal

Buffalo Wild Wings, which has been publicly owned since 2003, has a new owner. Arby's Restaurant Group will acquire the 1,250-unit brand as a privately held subsidiary for $2.9 billion or $157 per share in cash, including its net debt.

"Buffalo Wild Wings is one of the most distinctive and successful entertainment and casual dining restaurant companies in America," Arby's Restaurant Group CEO Paul Brown said in an early morning press release confirming the acquisition. "We are excited to welcome a brand with such a rich heritage, led by an exceptionally talented team. We look forward to leveraging the combined strengths of both organizations into a truly differentiated and transformative multi-brand restaurant company."

The deal, according to the release, represents a 38 percent premium to Buffalo Wild Wings 30-day volume-weighted average stock price as of Nov. 13, 2017, the latest trading day before news reports started speculating about the transaction.

Buffalo Wild Wings CEO Sally Smith said in the release that the deal is a good one for the brand's investors. 

"This transaction provides compelling value to our shareholders and is a testament to the hard work and efforts of our talented team members and franchisees," she said. "We are confident that the strength of our two industry-leading brands, under the sponsorship of Roark Capital — an experienced restaurant and food service investor — will enable us to capitalize on significant growth opportunities in the years ahead.:

The deal is expected to close during the first quarter of next year and is not subject to a financing condition as long as it's approved by BWW shareholders and complies with customary closing conditions and regulatory approvals. BWW will then be a privately held subsidiary of Arby's Restaurant Group Inc. that continues to operate as an independent brand, with Brown serving as CEO of the parent company.

Arby's, which has 3,300 locations and is majority-owned by Roark Capital Group affiliates, said in the release that Roark affiliates "are committing all of the equity that, together with the proceeds of debt financing, will be necessary to complete the transaction." Certain Marcato Capital Management LP-advised funds have agreed to vote for the transaction. Marcato owns approximately 6.4 percent of BWW's outstanding shares.

Buffalo Wild Wings has taken a few hits lately. It reported in July that shares plunged 10 percent after a huge earnings miss. Sales have also been down.