Arby's buys Buffalo Wild Wings in deal worth more than $2 billion

Alicia Cross
November 30, 2017

Buffalo Wild Wings announced Tuesday that it has entered into a definitive merger agreement with Arby's Restaurant Group.

The chain has faced its share of challenges in recent quarters. Roark Capital already owns an assortment of prepared food brands, including Carl's Jr, Hardee's, Corner Bakery, Culver's, Auntie Anne's Pretzels, Carvel Ice Cream, Cinnabon, Moe's Southwest Grill and Jimmy John's.

Buffalo Wild Wings, also known as B-Dubs, was facing vast pressure from activist investors to go through with the Arby's deal.

Arby's Is Buying Buffalo Wild Wings For More Than $2.4 Billion

In a statement, Sally Smith, CEO of Buffalo Wild Wings, said, "We are confident that the strength of our two industry-leading brands. will enable us to capitalize on significant growth opportunities in the years ahead". Within a few years, it added several locations around OH and the Midwest and Ken Dahlberg, the Twin Cities businessman who created the Miracle-Ear hearing aid, became its principal investor and owner. The per-share offer is 38 percent higher than Buffalo Wild Wings' 30-day average stock price as of November 13, the last trading day before speculation about the merger began. In 1996, he made her the company's chief executive. Buffalo Wild Wings posted adjusted earnings per share of $1.36. Shares were up another 6.5 percent to $155.90 in premarket trading Tuesday, lifting it more than 30 percent above that closing price. Its restaurants took advantage of the rise of high-definition TVs, multiple sources of sports programs and the craft beer craze to create a high-energy destination for families and sports fans.

A leading culprit has been chicken wing prices. Attempts to raise prices led to customer complaints. He said the company should sell the locations it owned to franchisees and give the proceeds to shareholders.

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.

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