Merger mania hits the Top 500

A number of brands traded hands in 2018, and 2019 is not looking much different.
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top 500

One of the biggest trends in today’s restaurant industry is the merger mania currently engulfing chains both large and small. The past year saw an extremely active M&A market—including many go-private deals as private-equity firms and strategic buyers acquire restaurant chains to get bigger.

Overall, more than 70 restaurant chains have traded hands over the past two years. Here’s a look at some of the biggest and most notable deals involving publicly traded companies:

Roark Capital-owned Arby’s was busy in 2018. It started with the acquisition of Buffalo Wild Wings for $2.9 billion, creating Inspire Brands. Inspire then added a third big concept, acquiring burger chain Sonic Drive-In for $2.3 billion.

Del Frisco’s Restaurant Group also tried to strengthen its portfolio in 2018 with two big moves. The company sold its struggling Sullivan’s chain to Romano’s Macaroni Grill, and it also purchased the parent of Barcelona Wine Bar and Bartaco for $325 million.

Charlotte, N.C.-based Bojangles’ Famous Chicken ‘n Biscuits reached a deal in 2018 with a group of private-equity firms after closing locations amid weakening same-store sales. Another chain that has been struggling with slowed sales, Zoes Kitchen, was acquired by growth chain Cava. The deal was backed by former Panera Bread CEO Ron Shaich.

There’s also been a string of companies that have gone public since 2014 now opting to go private. One such chain, Fogo de Chao, was sold to Rhone Capital for $560 million earlier in 2018. Take-and-bake pizza chain Papa Murphy’s followed a similar path, announcing just recently after exploring strategic options that it was being acquired by MTY Group, the Canadian operator that owns Pinkberry, Cold Stone Creamery and other brands, for about $190 million. MTY itself has been on a perpetual buying binge, now operating more than a dozen concepts, which include its acquisition of Kahala Brands in 2016 and the purchase of The Counter last year.

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