Sandwich chain Subway sold to Roark Capital for $9.55 billion
Popular sandwich chain Subway is selling itself to private equity firm Roark Capital for $9.55 billion. The deal ends a long-drawn auction that saw several competing bids and comes with several conditions that defer payment on part of the deal consideration. Founded in 1965, Subway is still owned by its founding families.
Over the years it has become one of the world’s largest restaurant chains, with 37,000 outlets in more than 100 countries. According to a Reuters report citing sources the company has attached some conditions to some of the windfall the two families that own it will get. The deal was valued at $8.95 billion, excluding the earn-out target.
In order for the full price to be paid, Subway's cash flow would need to reach certain milestones over a specified period after the deal closes. A press note from the sandwich maker said that the deal would combine the chain's “global presence and brand strength with Roark's deep expertise in restaurant and franchise business models". The private equity firm has around $37 billion in assets under management and specialises in franchised businesses.
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