Arby’s and Buffalo Wild Wings owner Inspire Brands announced Tuesday that it plans to acquire Sonic for $2.3 billion in cash, including debt. Adding slushes, burgers and milk shakes to its portfolio.
Sonic shares spiked to a record high on the news. Other fast-food and casual-dining restaurants, including Jack in the Box, Wendy's and Shake Shack are also rallying on the announcement.
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Under the agreement, the drive-in fast food chain will become a privately-held subsidiary of the restaurant group, whose portfolio already includes more than 4,700 fast food locations worldwide. Sonic will also continue to be operated as an independent brand.
Paul Brown, CEO of Inspire Brands, said Sonic’s “highly differentiated brand” is an ideal fit for the company and it is excited to build off of the company’s momentum for long-term growth.
Inspire agreed to buy the company for $43.50 per share, which represents a premium of approximately 19% per share, according to Sonic’s closing stock price Monday.
“This transaction delivers significant, immediate and certain value to Sonic shareholders, and the private ownership structure will provide important benefits to our guests, franchisees and employees,” Cliff Hudson, Sonic’s CEO said in a statement.
The deal is set to close by the end of 2018.
Before the deal, Sonic shares had gained 33 percent this year.