In a bold move, the sandwich chain Subway, which is owned by DeLuca and Buck families has been sold to Roark Capital for $9.95 billion. Roark Capital will now become one of the biggest restaurant operators in the world as a result of the purchase. Jimmy John’s, Arby’s, Baskin-Robbins, and Buffalo Wild Wings are just a few of the restaurant brands that Inspire Brands, the company controls and owns.
“This transaction reflects Subway’s long-term growth potential, and the substantial value of our brand and our franchisees around the world,” Subway CEO John Chidsey said in a statement. “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 purchase price was “around $9.6 billion,” according to the Wall Street Journal, which is a little less than the chain’s $10 billion asking price. The completion of the transaction is “subject to regulatory approvals and customary closing conditions,” according to Subway.
According to the sources with knowledge of the situation, these terms are known as an earn-out—defer payment on a portion of the deal value.
Subway’s cash flow would need to meet specific benchmarks over a predetermined time after the acquisition closes in order for the full price to be paid, they said.
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