Published: Tue, November 28, 2017
Money | By Armando Alvarado

Arby's reaches deal to buy Buffalo Wild Wings for $2.4 billion

Arby's reaches deal to buy Buffalo Wild Wings for $2.4 billion

The rebound at Arby's has come as diners turn away from so-called casual dining chains like Buffalo Wild Wings, where customers typically sit down and are served by waiters.

"Buffalo Wild Wings is one of the most distinctive and successful entertainment and casual dining restaurant companies in America", says Paul Brown, CEO of Arby's Restaurant Group, Inc, in a statement.

B-Dubs, as it is known to fans, built a reputation by serving hot chicken wings, cold beer and offering multiple giant TV screens featuring sporting events.

A pedestrian walks past a Buffalo Wild Wings restaurant in NY, U.S., February 6, 2017.

The deal calls for Arby's to pay $157 per share in Buffalo Wild Wings stock. Buffalo Wild Wings posted adjusted earnings per share of $1.36.

Roark's purchase, which including debt values Buffalo Wild Wings at about $2.9 billion, is the latest in a flurry of restaurant takeovers by private equity firms.

Following the deal close, expected during the first quarter of 2018, Buffalo Wild Wings will become a privately held unit of Arby's and operate as an independent brand.

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Marcato, which owns a 6.4 percent stake in the wing chain, launched its campaign in July 2016, pressuring the board to pursue strategies that it believed would boost the company's stock price, which had lagged peers in the previous year.

"We are excited about this merger and confident Arby's represents an excellent partner for Buffalo Wild Wings", Smith, who has remained CEO while the company searched for a successor, said in a statement.

Roark Capital is a prominent player in the food industry, with investments in chains such as Carl's Jr., Carvel and Auntie Anne's. "We are excited to welcome a brand with such a rich heritage, led by an exceptionally talented team".

Minneapolis-based Buffalo Wild Wings has more than 1,250 locations in 10 countries.

Buffalo Wild Wings grew out of a wings restaurant that opened near the Ohio State University campus in Columbus in 1982. In 1996, he made her the company's chief executive. He said the company should sell the locations it owned to franchisees and give the proceeds to shareholders.

The company's growth started to level off about three years ago and executives considered developing pizza and Mexican food restaurants.

A leading culprit has been chicken wing prices.

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