Shares of Sonic Corp. (SONC, Financial) surged to an all-time high of $44.87 on Tuesday after the fast-food chain announced it is being acquired by Inspire Brands Inc., the parent company of Arby’s, Buffalo Wild Wings and Rusty Taco.
According to the terms of the $2.3 billion deal, which includes debt, shareholders of the Oklahoma City-based company will receive $43.50 per share, a 19% premium to its closing price on Monday.
Inspire Brands, which was founded in February 2018 after Arby’s acquired Buffalo Wild Wings, is majority owned by private equity firm Roark. According to CNBC, the addition of America’s drive-in restaurant will build onto the company’s portfolio of brands, growing its operations to more than 8,000 locations and generating more than $12 billion in combined system sales.
In a statement, Inspire Brands CEO Paul Brown said the popular burger chain is “an ideal fit.”
“We have tremendous respect for Sonic’s exceptional team of employees and franchise owners, who have built one of the industry’s most distinctive restaurant brands,” he said.
Upon closure of the deal, which is expected by the end of the year, Sonic will continue to operate as an independent business. In a statement, Sonic CEO Cliff Hudson said the acquisition validates the actions the restaurant chain has taken over the last year to grow traffic and improve sales.
“We look forward to working closely with Inspire as we continue to provide made-to-order American classics, distinctive flavors and the most personalized guest experience in our industry,” he added.
With a market cap of $1.56 billion, Sonic’s shares were up 18.15% on Tuesday morning. GuruFocus estimates the stock has climbed 60% year to date.
Disclosure: No positions.
