(New York) The American sandwich chain Subway will leave the family bosom of its co-founders nearly sixty years after its creation, its acquisition by the American investment company Roark Capital was announced Thursday, for an undisclosed sum.
“Subway today announces that it has entered into a definitive agreement to be acquired by affiliates of Roark Capital. This transaction represents an important milestone on Subway’s multi-year transformational journey,” the company said in a not-so-serious statement.
A source familiar with the negotiations told AFP on Tuesday that the offers exceeded $9 billion. The Wall Street Journal had put Roark’s at around $9.6 billion.
This would be the third largest acquisition in the restaurant sector in the United States, after Burger King’s acquisition of the Tim Hortons chain in 2014 (11.4 billion) and Dunkin’ Brands by Inspire Brands in 2020 (11. 3 billion) and ahead of that of the bakery chain Panera Bread by the European investment company JAB Holding in 2017 (7.5 billion).
Inspire Brands was founded in 2018 under the leadership of Roark (Arby’s, Dunkin, Baskin-Robbins, Orange Theory gyms, etc.).
Contacted by AFP, Roark did not react immediately.
The Atlanta-based company manages $37 billion in assets. Its investment portfolio generates about $77 billion in revenue annually, with 69,000 locations in 90 countries, according to its website.
The timing of the operation, subject to the approval of the regulatory authorities, has not been specified.
According to the source close to the negotiations, a consortium bringing together the American Sycamore Partners and the British TDR Capital was also in the running.
Subway announced in February that its shareholders were exploring a possible sale.
“Subway has a bright future with Roark and we are committed to continuing to focus on a win-win-win approach with our franchisees, customers and employees,” Subway CEO John Chidsey said in the statement.
Roark’s teams, he told the WSJ on Thursday, “understand our business. From a family perspective, it was a compelling offer that works for everyone.”
He said he intends to remain in charge after the acquisition.
Subway noted that the transaction would “combine Subway’s global presence and brand strength with Roark’s extensive restaurant and franchise management expertise.”
This represents a “big bet” by Roark “on a channel that, while very well known, has at times struggled to generate growth,” commented Neil Saunders, director at GlobaData.
“Roark brings more to the table than any other investor would have” and his “strong operating experience will come in handy for Subway, especially in the US market where it remains well below its peak a year ago. a few years,” he added.
“International growth is another area of opportunity that Roark will certainly exploit, as Subway has reached saturation point in the United States,” said Mr. Saunders.
Subway has more than 37,000 franchised restaurants in more than 100 countries, including more than 20,000 in the United States.
In June, he presented a franchise agreement providing for the opening of 4,000 restaurants in mainland China within twenty years.
The chain, not listed on the stock exchange, is not required to make public its financial results or its shareholding.
However, it gives some indications: in May, it announced its tenth consecutive quarter of increased sales.
These increased by 9.8% at constant number of restaurants worldwide in the first half of 2023.
Subway was founded in 1965 in Bridgeport, Connecticut by 17-year-old Fred DeLuca, who was looking to fund his medical studies. Peter Buck, a nuclear physicist friend of his family, lends him the necessary 1000 dollars.
The first died in 2015, the second in 2021. The group has been led since 2019 by John Chidsey, the first boss of Subway not to belong to the families of the founders.