Arby's to acquire Buffalo Wild Wings in $2.9B deal

Posted November 30, 2017

Meat-centric sandwich chain Arby's said Tuesday that it's buying Buffalo Wild Wings for about $2.4 billion, making it the latest casual restaurant chain to be taken private.

Arby's Restaurant Group Inc. said it would pay $157 for each share of Buffalo Wild Wings, a 7 percent premium to its Monday closing price of $146.40.

Minneapolis-based Buffalo Wild Wings is spread across 1,250 locations in 10 countries.

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

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Roark is likely to focus first on improving Buffalo Wild Wings' food and operations, which should be easy fixes for a firm that's experienced in the restaurant industry, according to Michael Halen, an analyst at Bloomberg Intelligence.

The deal comes as Buffalo Wild Wings has seen a recent increase in the cost of chicken, "although the cost is down 20 percent from its high", USA Today reported. "We are excited to welcome a brand with such a rich heritage". The $2.9 billion acquisition is still awaiting approval from Buffalo Wild Wings shareholders. In the third, the company reported a net earnings decrease of almost 20 percent as its cost of sales rose to 30.8 percent of restaurant sales from 28.9 percent during the same quarter a year ago.

When Buffalo Wild Wings in 2003 filed to sell shares to the public, it had 217 locations in 27 states, 77 that it owned directly and the rest owned and operated by franchisees. Buffalo Wild Wings said traditional wings prices rose by 25.6 percent since a year ago, and cost the brand $2.16 per pound during the third quarter.

Buffalo Wild Wings has also faced pressure from activist investor Marcato Capital Management LP. In June 2017, Marcato won three seats on the company's board.