Looks like Buffalo Wild Wings may be making some changes pretty soon. Arby’s founder is acquiring about buying Buffalo Wild Wings for whooping $2.4 BILLION !!
via USA Today,
Fast-food chain Arby’s Restaurant Group said Tuesday it reached a deal to acquire Buffalo Wild Wings, which promotes the slogan “wings, beer, sports” in its advertisements, for $2.4 billion in cash.
The deal comes as the casual dining sector is ailing as Americans have rediscovered home meals amid low grocery prices and new food delivery options. Competition from fast-casual competitors and higher labor costs also are hurting.
Buffalo Wild Wings also had been battered by a sharp increase in the cost of chicken wings, although the cost is down 20% from its high, according to analysts at investment bank UBS.
The company has recently bolstered foot traffic with a half-price deal on wings and has gleaned benefits from investments in delivery.
Buffalo Wild Wings had been a “star performer” in the sector for years but recently “lost their value proposition to families with kids,” NPD Group restaurant industry analyst Bonnie Riggs said.
Arby’s private equity owner Roark Capital Group is backing the deal.
Activist investor Mick McGuire’s Marcato Capital Management, which had bashed Buffalo Wild Wings’ strategy and pushed for major changes, agreed to support the deal. Marcato’s criticism had culminated in a big shakeup in June when the restaurant chain’s longtime CEO, Sally Smith, announced her retirement.
Minneapolis-based Buffalo Wild Wings has more than 1,250 locations in 10 countries. Arby’s has more than 3,300 in seven countries.