Financing

Arby’s owner to buy Sonic Corp. for $2.3B

The deal will give Inspire Brands its third major chain and fourth overall.
Photograph: Shutterstock

Inspire Brands on Tuesday said it has an agreement to buy the drive-in chain Sonic Corp. in a deal valued at $2.3 billion.

The owner of Arby’s and Buffalo Wild Wings has agreed to pay $43.50 per share for Sonic stock, giving the company its third major chain and fourth overall to go with upstart taco concept Rusty Taco.

The per-share price is a 19% premium over Sonic’s closing price on Monday.

“Sonic is a highly differentiated brand and is an ideal fit for the Inspire family,” Paul Brown, CEO of Inspire Brands, said in a statement. “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.”

The deal is the latest in a series of deals taking companies private, as the value of publicly traded restaurant chains has declined while numerous buyers such as the Roark Capital-backed Inspire are gearing up to buy companies.

Earlier this year, for instance, Inspire completed its purchase of Buffalo Wild Wings, while Fogo de Chao and Bravo Brio Restaurant Group went private. More recently, Cava Group agreed to buy Zoes Kitchen.

Sonic, which is based in Oklahoma City, operates more than 3,600 drive-ins, and last year it generated $4.4 billion in system sales. Earlier this month, the company said that its same-store sales, which had been struggling of late, rose 2.6% systemwide.

The $2.3 billion includes the assumption of debt and, according to a Restaurant Business analysis, would give Sonic an approximate valuation of just under 16 times trailing earnings before interest, taxes, depreciation and amortization, or EBITDA.

Cliff Hudson, the company’s CEO, said that the proposed sale to Inspire “validates the actions we have taken over the last year to grow traffic and improve sales while delivering differentiated offerings and superior guest service.”

He said the company’s board of directors “conducted a comprehensive review of a wide range of strategic options to maximize shareholder value.”

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