Arby’s parent company is reportedly set to buy Subway for $9.6 billion.
Subway brass said the move will see some 23,000 new stores open across the globe – adding to the eatery’s already impressive 33,679 locations worldwide.
It serves as the latest saga in the $5 footlong provider’s winding journey from a single sandwich shop in 1965, to the world’s most widespread fast-food option. Founded by an ex-nuclear physicist and intrepid teen, it’s remained in the family ever since.
Sources told Reuters then that Subway was targeting well over $9 billion in a deal, and remains uncertain whether TDR and Sycamore can meet its price expectations. Another group led by Roark Capital was in the running, the sources had added.
Private equity firm Roark primarily invests in the franchised consumer and business services sectors. It has invested in Inspire Brands, which is the owner of Arby’s, Baskin-Robbins, Buffalo Wild Wings and Dunkin’ among others.
The announcement did not specify the terms of the deal, but many familiar with the matter said the firm – which has been dogged by rumors it was mulling a sale due to surging costs and competition – accepted an offer from Roark tapped at $9.55billion.
After announcing the transaction, Subway Chief Executive John Chidsey – who assumed the position in 2019 and is not one of the Subway heirs – said the company would benefit from Roark’s already established franchising and marketing networks.
In comments to The Wall Street Journal, the 61-year-old CEO said: ‘They understand our business.’
Citing a series of store closures over the years, the CEO claimed the maneuver will ‘especially’ benefit the US market, ‘where [store numbers] are well below the peak it hit a few years ago.’
Speaking on behalf of descendants of late founders Peter Buck, whose initial $1,000 in seed money helped get the empire up and running, and Bridgeport’s Fred DeLuca, who was 17 when he presented his vision to Buck, he said they approved of the deal.
“Subway does not intend to make any further public comment regarding the process until the transaction has been completed,” the company told Reuters in an emailed statement.
Reuters reported earlier this month that private equity firms TDR Capital and Sycamore Partners were in talks to team up in their pursuit to acquire Subway, which in February said it was exploring a possible sale of its business.
