Subway sold for $14.8b to Roark Capital
Roark Capital Group has won the race to acquire US sandwich chain Subway after seeing off a late challenge from a rival bid group led by TDR Capital and Sycamore Partners.
The private equity firm has entered into a definitive agreement to buy Subway, according to a statement on Thursday. Financial details were not disclosed. Bloomberg News reported earlier today that Roark was putting the final touches on its takeover of the company.
The deal is valued at roughly $US9.55 billion ($14.8 billion), people with knowledge of the matter said, asking not to be identified discussing confidential information. Roark will pay about $US9 billion upfront, with the remainder coming in future so-called earnout payments, they said.
Subway has 37,000 stores worldwide.
Morgan Stanley, Barclays, JPMorgan, Mizuho, MUFG, Rabobank and Wells Fargo & Co. are providing financing of around $US5 billion to back the deal, the people said.
The company has been held privately for the past 60 years by founders Peter Buck and Fred DeLuca and their families and the deal will deliver a massive payday to Buck and DeLuca’s heirs.
Roark beat competition from TDR and Sycamore, which brought on Goldman Sachs’ asset management arm and sovereign wealth fund Abu Dhabi Investment Authority in a last-ditch effort to come out on top, Bloomberg News reported on Tuesday.
The Wall Street Journal reported on Monday that Roark was in advanced talks to acquire Subway for around $US9.6 billion and looking to finalise a deal this week. Axios later reported that the founding family hadn’t yet picked a buyer.
One of the most recognisable names in fast-food, Subway is the largest restaurant chain in the US by store count, dwarfing names like McDonald’s and Burger King.
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