Private equity firm Roark Capital is in the lead to acquire sandwich chain Subway for well over $9 billion after attaching conditions to some of the windfall the two families that own it will get, people familiar with the matter said on Tuesday. These conditions, known as an earn-out, defer payment on part of the deal consideration, the sources said. For the full price to be paid, Subway's cash flow would need to reach certain milestones over a specified period after the deal closes, the sources added.
FILE PHOTO: A Subway sandwich shop logo is pictured in the Manhattan borough of New YorkNEW YORK - Private equity firm Roark Capital is in the lead to acquire sandwich chain Subway for well over $9 billion after attaching conditions to some of the windfall the two families that own it will get, people familiar with the matter said on Tuesday.
The families put Subway up for sale hoping to fetch more than $10 billion based on its strong brand and international growth, but the private equity firms countered it was worth less because they deemed its U.S. business saturated. The consortium has been seeking to convince Subway's owners that a deal with Roark would face U.S. antitrust risk given the latter's ownership of other restaurant brands, including sandwich chain Jimmy John's, the sources said.
Earn-out structures, while uncommon in the consumer and retail sector, are increasing in frequency in a challenging market for mergers and acquisitions as a way to reconcile price differences. Subway, which has closed thousands of U.S. locations since 2016, said a year ago that it wants to shift away from its current base of small franchisees that own just one or two shops, which tend to be family-run and sometimes barely scrape by.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Subway Sandwich Chain in Advanced Talks to Sell to Roark Capital, WSJ ReportsPrivate equity firm Roark Capital Group is in advanced talks to acquire sandwich chain Subway for around $9.6 billion, The Wall Street Journal reported on Monday.
Read more »
Goldman to Join TDR’s Subway Bid to Rival Frontrunner RoarkTDR Capital and Sycamore Partners have brought in Goldman Sachs Group Inc.’s asset management arm and a sovereign wealth fund as they make a last-ditch effort to beat out frontrunner Roark Capital Group in the bidding for sandwich chain Subway, according to people familiar with the matter.
Read more »
Sigma Lithium, eyeing buyout, sues ex-CEO and daughter-in-law over trade secretsThe complaint was filed on Monday against Calvyn Gardner, who until January was Sigma’s co-CEO with Ana Cabral-Gardner, who he is divorcing and who remains CEO
Read more »
Sigma Lithium, eyeing buyout, sues ex-CEO and daughter-in-law over trade secretsBy Jonathan Stempel NEW YORK (Reuters) - Sigma Lithium, which produces metal used in electric vehicle batteries, has sued a former co-chief executive ...
Read more »
Sigma Lithium, eyeing buyout, sues ex-CEO and daughter-in-law over trade secretsA roundup of all the mining news in the precious metals sector with a variety of company news, mining sector analysis, newsletter writer insights and executive interviews.
Read more »