Subway Acquired by Private Equity Firm
Private equity firm Roark Capital has successfully acquired Subway, marking the end of a six-month quest for a buyer. This acquisition also signifies the conclusion of Subway's nearly six-decade tenure as a family-owned business.
In an official statement, Subway highlighted that this transaction is a significant step in the brand's ongoing transformation journey. The merger capitalizes on Subway's global presence and brand strength, coupled with Roark's extensive expertise in restaurant and franchise business models.
Roark Capital holds investments in various prominent restaurant chains, including Arby’s, Auntie Anne’s, Buffalo Wild Wings, Carvel, and Sonic, among others.
Subway's CEO, John Chidsey, expressed optimism about the future under Roark's ownership. Chidsey stated, "Subway has a bright future with Roark, and we are committed to continuing to focus on a win-win-win approach for our franchisees, our guests, and our employees."
While the specific terms of the deal remain undisclosed, reports from the Wall Street Journal suggest that the purchase price is around $9.6 billion, slightly below Subway's initial asking price of $10 billion. The transaction's finalization is subject to regulatory approvals and customary closing conditions, according to Subway's announcement.
Subway initiated the process of seeking a buyer in February.
Roark Capital's acquisition marks one of the significant acquisitions in the history of the fast-food industry, falling just short of Inspire Brands' $11.3 billion acquisition of Dunkin' in October 2020. Inspire Brands, which owns Subway's competitor Jimmy John's, is also under the umbrella of Roark Capital.
In recent years, Subway has undertaken substantial efforts to rejuvenate its brand, including introducing a revamped menu with freshly sliced meat, store renovations, and a heightened focus on international expansion. Notably, the company achieved positive sales growth for ten consecutive quarters, with a 9.5% increase at its North American locations during its latest quarter, according to its announcement.
However, despite its sales rebound, the number of Subway stores in the United States declined to 20,576 last year, a significant drop from its peak of 27,219 locations in 2015, as reported by Technomic.
