Arby's is Buying Buffalo Wild Wings for $2.9 Billion

Arby's is Buying Buffalo Wild Wings for $2.9 Billion

Arby's is Buying Buffalo Wild Wings for $2.9 Billion

Arby's Restaurant Group has announced a deal to buy Buffalo Wild Wings for $2.5 billion in cash.

Under the terms of the transaction, affiliates of Roark Capital Group will pay $157 a share for Buffalo Wild Wings, just a few dollars more than the $150 price that the company traded at on the day Marcato and McGuire won the proxy battle in June.

The company says in a statement that when including Buffalo Wild Wings' debt, the deal is valued at $2.9 billion.

Under the terms of the deal, Buffalo Wild Wings will become a closely held subsidiary of Arby's and will continue to operate as an independent brand, the companies said.

Roark is likely to focus first on improving Buffalo Wild Wings' food and operations, which should be easy fixes for a firm that's experienced in the restaurant industry, according to Michael Halen, an analyst at Bloomberg Intelligence. The per-share offer is 38 percent higher than Buffalo Wild Wings' 30-day average stock price as of November 13, the last trading day before speculation about the merger began. "We look forward to leveraging the combined strengths of both organizations into a truly differentiated and transformative multi-brand restaurant company". The shares got a small boost in October when results for the fall quarter turned out better than expected and a large one two weeks ago when news emerged that McGuire was seeking a buyer.

Arby's Is Buying Buffalo Wild Wings For More Than $2.4 Billion
Arby's to buy Buffalo Wild Wings in $2.9B deal

Buffalo Wild Wings' stock climbed 6.5% in premarket trading.

Buffalo Wild Wings, also known as B-Dubs, was facing enormous pressure from activist investors to go through with the Arby's deal.

Buffalo Wild Wings' CEO Sally Smith said Tuesday that the merger "provides compelling value to our shareholders and is a testament to the hard work and efforts of our talented Team Members and franchisees".

A leading culprit has been chicken wing prices. Restaurant level profit fell from 17.6 percent of restaurant sales during Q3 2016 to 16.6 percent of restaurant sales this year.

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