The past few years have been a tough stretch for shareholders of Buffalo Wild Wings (BWLD 155.90, +9.50, +6.5%) as the specialty restaurant operator has been hurt by rising food costs and disappointing same-store sales. At its low in September, shares of BWLD had been cut in half from the high of just over $200 per share they hit in September 2015.
Things have turned better of late, though, for BWLD thanks to takeover speculation that became fact today. Buffalo Wild Wings has entered into a definitive merger agreement whereby Arby's Restaurant Group,which is majority owned by private equity firm Roark Capital, will acquire BWLD for $157 per share in cash.
Including net debt, the transaction is valued at approximately $2.9 billion.
Roark Capital's interest in Buffalo Wild Wings came to light in mid-November after The Wall Street Journal reported the private equity firm might be exploring the possibility of acquiring Buffalo Wild Wings for more than $150 per share. At the time, BWLD was trading at $117.25, so the actual offer represents a 33.9% premium over the unaffected stock price.
That's a hefty premium and most likely a driving factor behind the decision of Marcato Capital Management, which owns approximately 6.4% of BWLD and has been agitating for changes at the company, to enter into an agreement to vote in favor of the deal.
The transaction, which is not subject to a financing condition, is expected to close during the first quarter of 2018, pending shareholder and regulatory approval.
Buffalo Wild Wings will be a privately-held subsidiary of Arby's Restaurant Group and Paul Brown, CEO of Arby's Restaurant Group, will serve as CEO of the parent company.
Buffalo Wild Wings has a diverse set of specialty restaurant competitors that includes the likes of Dave & Busters (PLAY), Brinker (EAT), and Darden Restaurants (DRI). On the fast casual side of things, Wingstop (WING) provides some added competition as well.