Arby’s Restaurant Group Inc. has agreed to buy Buffalo Wild Wings Inc. for $157 per share, the companies said on Tuesday.
The merger values the Minneapolis-based chicken wing chain at $2.9 billion, including the company’s debt.
Arby’s is owned by Roark Capital Group, which has been said for several days to be bidding on Buffalo Wild Wings.
The $157 per share price that Roark is paying for Buffalo Wild Wings is higher than the $150 per share initially reported, and is a 38-percent premium off of Buffalo Wild Wings’ stock price on Nov. 13, before reports of a possible deal were published.
The merger is expected to close in the first quarter of next year. Afterwards, Arby’s CEO Paul Brown will be CEO of the parent company to both restaurant chains.
“We look forward to leveraging the combined strengths of both organizations into a truly differentiated and transformative multi-brand restaurant company,” Brown said in a statement.
Buffalo Wild Wings had been one of the hottest restaurant stocks on Wall Street, with a price exceeding $200, until sales began weakening two years ago. Earlier this year, the activist investor Marcato Capital Management won three seats to the company’s board of directors, prompting longtime CEO Sally Smith to announce her retirement.
Marcato, which owns 6.4 percent of the company, has agreed to vote in favor of the sale.
“This transaction provides compelling value to our shareholders and is a testament to the hard work and efforts by our talented team members and franchisees,” Smith said in a statement.
Buffalo Wild Wings operates more than 1,250 locations, split between company and franchised locations. Arby’s operates more than 3,300 locations.
Roark continues to be one of the most aggressive investors in the restaurant industry. It has invested in 62 franchised or multi-unit brands, and in recent years has acquired companies like Jimmy John’s and CKE Restaurants Inc. Its brands have $27 billion in annual revenue and more than 29,000 locations.