Subway, a well-known sandwich chain with global reach, is in the process of being acquired by private equity firm Roark Capital for $9.55 billion. The agreement, reached after a competitive auction, includes specific conditions related to the payment terms and performance targets.
The chain, established in 1965, has grown to become one of the world’s largest restaurant franchises, boasting over 37,000 outlets spread across more than 100 countries. Despite its extensive reach, Subway has remained under the ownership of its founding families.
The acquisition deal has been valued at $8.95 billion, excluding a component linked to earn-out targets. In this structure, the full price of the deal will be paid only if Subway’s cash flow achieves predetermined milestones over a specified period following the completion of the deal. This approach aims to align the company’s performance with the terms of the agreement.
Subway announced that the deal will merge its global presence and brand strength with Roark Capital’s expertise in restaurant and franchise business models. Roark Capital, a private equity firm with approximately $37 billion in assets under management, specializes in investing in and supporting franchised businesses. The firm already owns a portfolio of restaurant chains, including Arby’s, Dunkin’, and Buffalo Wild Wings.
The acquisition underscores Roark Capital’s strategic focus on franchised businesses and its commitment to enhancing Subway’s performance and market presence. The deal is expected to have a notable impact on the restaurant industry landscape and reflects ongoing trends in the franchising and food service sectors.
