After a protracted auction that saw many bids from private equity companies, sources indicated that Subway has decided to sell itself to private equity firm Roark Capital in a transaction that values the sandwich brand at more than $9 billion.
According to those with knowledge of the situation, Roark prevailed over a late push from a competing bidding group led by TDR Capital and Sycamore Partners, which also made a final offer of more than $9 billion.
On Thursday, Subway, which operates 37,000 restaurants in more than 100 countries, kept the specifics of the agreement a secret.
Roark Capital will become one of the biggest restaurant operators in the world as a result of the purchase. Jimmy John’s, Arby’s, Baskin-Robbins, and Buffalo Wild Wings are just a few of the restaurant brands that Inspire Brands, the company it controls, owns.
When Subway announced in February that it was considering a sale, private equity groups like Roark, Advent International, TDR Capital, and TPG as well as the asset management division of Goldman Sachs expressed interest.
Since the first location of the network debuted in 1965 as “Pete’s Super Submarines” in Bridgeport, Connecticut, the founding families have owned the restaurants. Peter Buck, a family friend, and Fred DeLuca, who was 17 at the time, formed it.
Prior to implementing its turnaround plan in 2021, when it updated its menu and increased marketing spending, Subway had struggled for several years to draw consumers amidst fierce competition from rivals like Popeyes and Chick-fil-A.
As evidenced by the 9.3% increase in same-store sales in North America during the first half of 2023, Subway’s efforts appear to be having an impact.