Arby's to Purchase Buffalo Wild Wings for $2.4 Billion

Dec. 1, 2017
In 2017, larger restaurant players looked to acquisitions to recharge revenue.

Arby's Restaurant Group, owned by Roark Capital, said Tuesday (Nov. 28), it’s buying Buffalo Wild Wings, Minneapolis, for about $2.4 billion, making "BDubs" as it's nicknamed, the latest casual restaurant chain to go private. Buffalo Wild Wings, which serves chicken wings in a sports bar atmosphere, has reported falling sales as it and other casual restaurants lose customers to cheaper and faster chains. The deal would transform it into a privately held subsidiary of Arby’s, operating as an independent brand.

In the most recent quarter, Buffalo Wild Wings reported a 2.3-percent sales drop at its established restaurants. The price represents a 7.2-percent premium to Monday's closing price, claimed this weeks news reports, and continues the wave of consolidation in the restaurant industry this year. According to Bloomberg, there have been a total of 173 restaurant buyouts in 2017, the most since 2006.

Roark Capital, Atlanta, is a private equity firm that owns 62 franchise and multi-unit brands, including popular restaurant chains Arby's, Hardee's, Cinnabon, Jimmy John's and Moe's Southwest Grill. Roark's bid was first reported November 14, but wasn't made official until Tuesday. According to a press release, the deal is expected to close in the first quarter of 2018.

The purchase is contingent upon the approval of Buffalo Wild Wings shareholders.

Other chains that have been taken private this year include Panera Bread, which was bought in July for more than $7 billion by JAB Holding Co., and sit-down chain Ruby Tuesday Inc., which agreed last month to be sold to private-equity firm NRD Capital for $146 million.

Analysts said the Arby's Buffalo Wild Wings chains seemed to be a good match for each other.