Continuing this week’s surge of private equity deals after Francisco Partners took over The Weather Company from IBM and Thoma Bravo acquired ForgeRock for $2.3 billion, Roark Capital entered into a definitive agreement to buy Subway, the ubiquitous “Eat Fresh” chain that popularized submarine sandwiches globally.
The value of the transaction was not disclosed, but major media outlets this week put it in the range of $9.6 billion to $10 billion as Roark reportedly battled it out with suitors including Goldman Sachs, TPG, Sycamore Partners and TDR Capital.
With $37 billion in assets under management, Atlanta-based Roark has minority or full ownership of an impressive number — and variety — of national and global restaurant chains. Roark’s Inspire Brands holding company owns a smaller sub sandwich chain, Jimmy John’s, in addition to Dunkin’, Baskin-Robbins, Arby’s, Buffalo Wild Wings and Sonic Drive-In. As if that were not enough, the firm owns chains including Auntie Anne’s, Cinnabon, Jamba, Moe’s Southwest Grill and Schlotzsky’s under the Focus Brands banner.
“This transaction reflects Subway’s long-term growth potential, and the substantial value of our brand and our franchisees around the world,” said Subway CEO John Chidsey. “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.”
Subway closed more than 3,500 U.S. locations since 2019, mostly during the COVID-19 pandemic, but it remains the largest restaurant chain in the U.S. and globally. The chain also recently reported positive same-store sales for the 10th consecutive quarter.
J.P. Morgan is acting as financial advisor, while Sullivan & Cromwell is serving as legal counsel to Subway. Final close of the deal is subject to customary closing conditions and regulatory approvals.
