Subway, one of the world’s largest quick service restaurant brands, has agreed to be acquired by Roark Capital at an enterprise value of $9.6 billion.
Subway serves made-to-order sandwiches, wraps, salads and bowls to millions of customers across more than 100 countries in nearly 37,000 franchised restaurants every day. Subway has the highest concentration of locations in North America with 20,603 in the United States, 2,881 in Canada, and 758 in Mexico.
Outside of North America, the countries with the most locations are Australia with 1,215, Brazil with 1,643, and the United Kingdom with 2,195. The company reached a peak of 27,129 United States locations in 2016. The sale to Roark follows Subway announcing its 10th consecutive quarter of positive same store sales.
Subway was founded by Fred DeLuca and financed by Peter Buck in 1965 as Pete’s Super Submarines. The Milford, Connecticut-headquartered company adopted the Subway name in 1972. Subway struggled following the death of Mr. DeLuca in 2015 and a sale of the company was inevitable with the death in 2021 of Mr. Buck. However, the sale to Roark follows Subway announcing its 10th consecutive quarter of positive same store sales.
“This transaction reflects Subway’s long-term growth potential, and the substantial value of our brand and our franchisees around the world,” said John Chidsey, CEO of Subway. “Subway has a bright future with Roark, and we are committed to continuing to focus on a win-win-win approach for our franchisees, our guests and our employees.”
Roark Capital Group invests in companies that have revenues from $20 million to $5 billion and EBITDA from $10 million to $500 million. Sectors of interest include franchised and multi-unit business models in the retail, restaurant, and service sectors; consumer products; consumer and business services. The Atlanta-headquartered firm has more than $37 billion in assets under management.
J.P. Morgan is the financial advisor to Subway on this transaction.
© 2023 Private Equity Professional | August 30, 2023
