Inspire Brands Inc. will acquire Sonic Corp. for approximately $2.3 billion. Following the completion of the transaction, Sonic will be a privately-held subsidiary of Inspire and will continue to be operated as an independent brand.
“Sonic is a highly differentiated brand and is an ideal fit for the Inspire family,” said Inspire CEO Paul Brown, adding that the company is “one of the industry’s most distinctive restaurant brands.”
The deal is the likely next step in Inspire Brands’ diversification strategy. Sonic boasted $4.4 billion in sales in 2017, according to Nation’s Restaurant News, beating out companies like Dairy Queen, Hardee’s and Five Guys, reported Fortune (Sept. 25). While that figure is still less than half of Wendy’s sales and just 11% of McDonald’s total sales, Inspire sees a clear opportunity for growth with Sonic.
“We’re excited to build on Sonic’s momentum as we leverage our combined expertise and capabilities to drive long-term growth,” Brown said.
The deal adds more than 3,600 Sonic stores to the company’s portfolio, which includes more than 4,700 Arby's, Buffalo Wild Wings and Rusty Taco locations worldwide. The company is a diversified one, with Arby’s the go-to burger- and chicken-alternative fast food choice for many consumers; Buffalo Wild Wings, which Inspire acquired last year for $3 billion, offering a fast-casual presence that can draw in sports fans as well; and Rusty Taco, enabling Inspire to compete in the Mexican food space.
Inspire is majority-owned by affiliates of the Roark investment firm.
“The deal underscores that private equity players continue to have an interest in putting money to work in the restaurants sector following an active restaurant M&A environment throughout 2017 and 2018,” said Baird analyst David Tarantino, reported CNBC (Sept. 25).
For the full story, go to this week’s Food Institute Report.
Several food companies reported earnings over the last week. While manufacturing and retail are thriving with increased sales during the pandemic, portions of the foodservice segment continues to struggle.read more
Chris is a business writer and market analyst that focuses on the Markets, Legal and Washington sections of the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He invites you to contact him via email at firstname.lastname@example.org to talk about anything food-related.
10 Mountainview Road
Upper Saddle River, NJ 07458
Food Institute reps are available to answer your questions
BECOME A MEMBER
For close to 90 years, The Food Institute has been the best "single source" for food industry executives, delivering actionable information daily via email updates, weekly through The Food Institute Report and via a comprehensive web research library. Our information gathering method is not just a "keyword search."