{"id":52572,"date":"2023-08-24T15:48:50","date_gmt":"2023-08-24T19:48:50","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/roark-capital-to-buy-sandwich-chain-subway-for-up-to-9-55-billion-sources\/"},"modified":"2023-08-24T15:48:52","modified_gmt":"2023-08-24T19:48:52","slug":"roark-capital-to-buy-sandwich-chain-subway-for-up-to-9-55-billion-sources","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=52572","title":{"rendered":"Roark Capital to buy sandwich chain Subway for up to $9.55 billion -sources"},"content":{"rendered":"
\n
\n

\u00a9 Reuters. FILE PHOTO: A person walks by a Subway restaurant in Manhattan, New York City, U.S., November 23, 2021. REUTERS\/Andrew Kelly\/File Photo\/File Photo<\/span>
\n<\/i>\n<\/div>\n

By Abigail Summerville, Anirban Sen and Deborah Mary Sophia<\/p>\n

NEW YORK (Reuters) -Private equity firm Roark Capital agreed on Thursday to buy Subway, in a deal that people familiar with the matter said values the U.S. sandwich chain at up to $9.55 billion, including debt, subject to targets in its financial performance. <\/p>\n

The deal marks the conclusion of a drawn-out auction that started in February and attracted interest from several private equity firms. Reuters reported on Tuesday on a so-called earn-out agreement that was key to Roark clinching a deal for Subway. <\/p>\n

For the full deal price to be paid, Subway’s cash flow would need to reach certain milestones over a period spanning two or more years after the deal closes, according to the sources. Without the earn-out, the deal is worth $8.95 billion, the sources said. <\/p>\n

Earn-out structures, while uncommon in the consumer and retail sector, are increasing in frequency in a challenging market for mergers and acquisitions as a way to reconcile price differences.<\/p>\n

The sources said the arrangement helped bridge a gap in the valuation expectations between Roark and the DeLuca and Buck families that own Subway, which started up nearly 60 years ago in Connecticut.<\/p>\n

The families were hoping to fetch more than $10 billion for Subway based on its strong brand and international growth, but the private equity firms countered it was worth less because they deemed its U.S. business saturated.<\/p>\n

Roark prevailed over a rival bidding group led by buyout firms TDR Capital and Sycamore Partners, whose final offer was for $8.75 billion including an earn-out, and $8.25 billion without, the sources said.<\/p>\n

Roark, which owns other restaurant operators and franchises, including rival sandwich chain Jimmy John’s, will pay Subway’s owners a break-up fee equivalent to 4% of the deal’s value should antitrust regulators thwart the deal, one of the sources said. <\/p>\n

The deal contact allows for 12 months for the transaction to be completed, according to the sources. <\/p>\n

Roark took the view that the restaurant market is too fragmented for the deal to raise competition concerns, the sources added.<\/p>\n

Jimmy John\u2019s has more than 2,600 restaurants in 43 U.S. states. Subway has more than 37,000 restaurants in over 100 countries.<\/p>\n

Roark and Subway, which announced the deal on Thursday, declined to comment on the terms. <\/p>\n

Roark currently controls Inspire Brands, the owner of restaurant chains including Jimmy John’s, Arby’s, Baskin-Robbins and Buffalo Wild Wings. <\/p>\n

Its experience of helping restaurant brands grow will be helpful, “especially in the U.S. market where it remains well below the peak it hit a few years ago”, said Neil Saunders, managing director of market research firm GlobalData.<\/p>\n

REVAMPING OPERATIONS<\/p>\n

Tax considerations were part of the calculus to sell Subway. This is because the estate of co-founder Peter Buck, who passed away in 2021, donated his 50% stake in the privately-held company to his philanthropic foundation under the terms of his will. This offers a shield from taxes on the sale of the stake. <\/p>\n

Founded in 1965 by 17-year-old Fred DeLuca and his family friend Buck, Subway has been owned by the founding families since its first restaurant opened as “Pete’s Super Submarines” in Bridgeport, Connecticut.<\/p>\n

The Milford, Connecticut-based company has been revamping its operations to deal with outdated decor and $5 deals on foot-long sandwiches that eroded franchisees’ profits. In 2021, the chain launched a menu overhaul and splashy marketing campaign as it embarked on a turnaround plan that has helped sales grow.<\/p>\n

Subway, which has closed thousands of U.S. locations since 2016, said a year ago that it wants to shift away from its current base of small franchisees that own just one or two shops, which tend to be family-run and sometimes barely scrape by.<\/p>\n

The company saw a 9.85% increase in same-store sales in the first half of 2023. Its 12-month earnings before interest, taxes, depreciation and amortization are around $800 million, according to the sources. <\/p>\n

JPMorgan Chase (NYSE:) and law firm Sullivan & Cromwell LLP advised Subway. Paul, Weiss, Rifkind, Wharton & Garrison LLP advised Roark Capital, while Morgan Stanley led the acquisition financing. <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters. FILE PHOTO: A person walks by a Subway restaurant in Manhattan, New York City, U.S., November 23, 2021. REUTERS\/Andrew Kelly\/File Photo\/File Photo By Abigail Summerville, Anirban Sen and Deborah Mary Sophia NEW YORK (Reuters) -Private equity firm Roark Capital agreed on Thursday to buy Subway, in a deal that people familiar with the […]<\/p>\n","protected":false},"author":1,"featured_media":988,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[1],"tags":[83],"class_list":["post-52572","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_format-post-format-video"],"yoast_head":"\nRoark Capital to buy sandwich chain Subway for up to $9.55 billion -sources | iFintechWorld<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters. FILE PHOTO: A person walks by a Subway restaurant in Manhattan, New York City, U.S., November 23, 2021. REUTERS\/Andrew Kelly\/File Photo\/File\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=52572\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Roark Capital to buy sandwich chain Subway for up to $9.55 billion -sources | iFintechWorld\" \/>\n<meta property=\"og:description\" content=\"\u00a9 Reuters. FILE PHOTO: A person walks by a Subway restaurant in Manhattan, New York City, U.S., November 23, 2021. REUTERS\/Andrew Kelly\/File Photo\/File\" \/>\n<meta property=\"og:url\" content=\"https:\/\/ifintechworld.com\/?p=52572\" \/>\n<meta property=\"og:site_name\" content=\"iFintechWorld\" \/>\n<meta property=\"article:published_time\" content=\"2023-08-24T19:48:50+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-08-24T19:48:52+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/indicatornews_6_800x533_L_1412601562.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"533\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/ifintechworld.com\/?p=52572#article\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=52572\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\"},\"headline\":\"Roark Capital to buy sandwich chain Subway for up to $9.55 billion -sources\",\"datePublished\":\"2023-08-24T19:48:50+00:00\",\"dateModified\":\"2023-08-24T19:48:52+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=52572\"},\"wordCount\":714,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"keywords\":[\"Featured\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/ifintechworld.com\/?p=52572#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/ifintechworld.com\/?p=52572\",\"url\":\"https:\/\/ifintechworld.com\/?p=52572\",\"name\":\"Roark Capital to buy sandwich chain Subway for up to $9.55 billion -sources | iFintechWorld\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/#website\"},\"datePublished\":\"2023-08-24T19:48:50+00:00\",\"dateModified\":\"2023-08-24T19:48:52+00:00\",\"description\":\"\u00a9 Reuters. FILE PHOTO: A person walks by a Subway restaurant in Manhattan, New York City, U.S., November 23, 2021. REUTERS\/Andrew Kelly\/File Photo\/File\",\"breadcrumb\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=52572#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/ifintechworld.com\/?p=52572\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/ifintechworld.com\/?p=52572#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/ifintechworld.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Roark Capital to buy sandwich chain Subway for up to $9.55 billion -sources\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/ifintechworld.com\/#website\",\"url\":\"https:\/\/ifintechworld.com\/\",\"name\":\"Repay Down\",\"description\":\"Latest Personal Finance News, Tips and Updates\",\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/ifintechworld.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/ifintechworld.com\/#organization\",\"name\":\"Repay Down\",\"url\":\"https:\/\/ifintechworld.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"width\":558,\"height\":90,\"caption\":\"Repay Down\"},\"image\":{\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/ifintechworld.com\"],\"url\":\"https:\/\/ifintechworld.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Roark Capital to buy sandwich chain Subway for up to $9.55 billion -sources | iFintechWorld","description":"\u00a9 Reuters. FILE PHOTO: A person walks by a Subway restaurant in Manhattan, New York City, U.S., November 23, 2021. REUTERS\/Andrew Kelly\/File Photo\/File","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/ifintechworld.com\/?p=52572","og_locale":"en_US","og_type":"article","og_title":"Roark Capital to buy sandwich chain Subway for up to $9.55 billion -sources | iFintechWorld","og_description":"\u00a9 Reuters. FILE PHOTO: A person walks by a Subway restaurant in Manhattan, New York City, U.S., November 23, 2021. REUTERS\/Andrew Kelly\/File Photo\/File","og_url":"https:\/\/ifintechworld.com\/?p=52572","og_site_name":"iFintechWorld","article_published_time":"2023-08-24T19:48:50+00:00","article_modified_time":"2023-08-24T19:48:52+00:00","og_image":[{"width":800,"height":533,"url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/indicatornews_6_800x533_L_1412601562.jpg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/ifintechworld.com\/?p=52572#article","isPartOf":{"@id":"https:\/\/ifintechworld.com\/?p=52572"},"author":{"name":"News Room","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61"},"headline":"Roark Capital to buy sandwich chain Subway for up to $9.55 billion -sources","datePublished":"2023-08-24T19:48:50+00:00","dateModified":"2023-08-24T19:48:52+00:00","mainEntityOfPage":{"@id":"https:\/\/ifintechworld.com\/?p=52572"},"wordCount":714,"commentCount":0,"publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"keywords":["Featured"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/ifintechworld.com\/?p=52572#respond"]}]},{"@type":"WebPage","@id":"https:\/\/ifintechworld.com\/?p=52572","url":"https:\/\/ifintechworld.com\/?p=52572","name":"Roark Capital to buy sandwich chain Subway for up to $9.55 billion -sources | iFintechWorld","isPartOf":{"@id":"https:\/\/ifintechworld.com\/#website"},"datePublished":"2023-08-24T19:48:50+00:00","dateModified":"2023-08-24T19:48:52+00:00","description":"\u00a9 Reuters. FILE PHOTO: A person walks by a Subway restaurant in Manhattan, New York City, U.S., November 23, 2021. REUTERS\/Andrew Kelly\/File Photo\/File","breadcrumb":{"@id":"https:\/\/ifintechworld.com\/?p=52572#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/ifintechworld.com\/?p=52572"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/ifintechworld.com\/?p=52572#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/ifintechworld.com\/"},{"@type":"ListItem","position":2,"name":"Roark Capital to buy sandwich chain Subway for up to $9.55 billion -sources"}]},{"@type":"WebSite","@id":"https:\/\/ifintechworld.com\/#website","url":"https:\/\/ifintechworld.com\/","name":"Repay Down","description":"Latest Personal Finance News, Tips and Updates","publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/ifintechworld.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/ifintechworld.com\/#organization","name":"Repay Down","url":"https:\/\/ifintechworld.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","width":558,"height":90,"caption":"Repay Down"},"image":{"@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","caption":"News Room"},"sameAs":["https:\/\/ifintechworld.com"],"url":"https:\/\/ifintechworld.com\/?author=1"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/52572","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=52572"}],"version-history":[{"count":1,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/52572\/revisions"}],"predecessor-version":[{"id":52573,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/52572\/revisions\/52573"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/media\/988"}],"wp:attachment":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=52572"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=52572"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=52572"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}