News

Arby's parent to buy Sonic for $2.3 billion

September 26, 2018

Arby's, Buffalo Wild Wings parent and Rusty Taco parent, Inspire Brands, has signed a deal to bring Sonic into the fold for a cash payment of $2.3 billion, or about $43.50 per share. The definitive merger agreement also includes assumption of Sonic's net debt, a news release said.

Inspire is a multi-brand restaurant company whose portfolio with more than 4,700 Arby's, Buffalo Wild Wings, and Rusty Taco locations worldwide. Following the completion of the transaction, Sonic will be a privately-held subsidiary of Inspire and will continue to be operated as an independent brand.

The agreement, which has been unanimously approved by Sonic's board, represents a premium of approximately 19 percent per share to Sonic's closing stock price on Sept. 24 this year and a premium of approximately 21 percent to Sonic's 30-day volume-weighted average price.

"Sonic is a highly differentiated brand and is an ideal fit for the Inspire family," Inspire Brands CEO Paul Brown, said in the release. "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."

Sonic Corp. CEO Cliff Hudson said the transaction validates the last year's action to boost traffic and sales at the drive-in chain, while also putting some innovate menu items into the mix.

"Our board of directors —taking into account the views of shareholders — conducted a comprehensive review of a wide range of strategic options to maximize shareholder value," Hudson said in the release. "This transaction delivers significant, immediate and certain value to Sonic shareholders, and the private ownership structure will provide important benefits to our guests, franchisees and employees.

Hudson said Sonic's deep engagement with its franchisees was appealing to Inspire Brands. He said franchisees are highly involved in everything from technology planning and new menu items, to marketing. 

"The team at Inspire recognizes the central role our franchisees have played, and will continue to play, in Sonic's success," Hudson said. "

The transaction must be approved by Sonic shareholders and satisfy customary closing conditions, including applicable regulatory approvals. It is expected to close by year's  end.