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Sonic shares jumped on Tuesday after it was announced that the burger chain would be acquired by the privately held Inspire Brands. (Photo: Mike Mozart / Flickr)

The company behind Arby's will buy drive-in burger chain Sonic in a deal announced Tuesday.

Inspire Brands, which took over Buffalo Wild Wings last year, will acquire Sonic for $2.3 billion including debt, the company said in a statement.

The purchase adds to Inspire's collection of restaurants that includes, alongside Arby's and Buffalo Wild Wings, Mexican food chain Rusty Taco.

The Sonic purchase plays into Inspire's overall strategy of acquiring distinct, dissimilar brands, the company said. Known for burgers, hot dogs and specialty drinks, Sonic brings focuses not present at Arby's or Rusty Taco while operating outside of the fast-casual realm where Buffalo Wild Wings exists.

Sonic's stock rose more than 18 percent Tuesday, CNBC reported, hitting its all-time high at $44.87 per share.

Sonic's $4.4 billion in sales last year topped well-known brands including Dairy Queen, Five Guys and Hardee's, according to Fortune, citing statistics Nation's Restaurant News, an industry journal.

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“Sonic is a highly differentiated brand and is an ideal fit for the Inspire family,” Paul Brown, Inspire's CEO, said in a statement, calling Sonic "one of the industry’s most distinctive restaurant brands.”

Sonic will continue to operate independently after the sale from its Oklahoma City headquarters, according to Business Insider.

Sonic shareholders will receive $43.50 per share in cash, Inspire said in its statement, a premium of roughly 19 percent to the chain's closing stock price on Monday.

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Follow Josh Hafner on Twitter: @joshhafner

Read or Share this story: https://usat.ly/2N1Kpwz</s>ATLANTA — Inspire Brands, owner of Buffalo Wild Wings, is buying the Sonic drive-in hamburger chain.

Inspire is paying $43.50 per share cash, or $2.3 billion, for Sonic, which has 3,600 restaurants in the U.S. Inspire expects the deal to close by the end of this year.

Sonic will operate as a separate business unit within Inspire and remain based in Oklahoma City. The first Sonic opened in Oklahoma in 1953.

Inspire says Sonic’s management team will also remain in place.

Sonic earned $63.7 million in its 2017 fiscal year, which ended Aug. 31. That was down slightly from the previous two years.

Atlanta-based Inspire was formed earlier this year when Arby’s acquired the Buffalo Wild Wings chain.

Inspire said Tuesday owning multiple chains will help it share resources, including customer loyalty data and suppliers.</s>The drive-in chain will now come under the bigger banner.

The Inspire Brands profile has just got a little bit bigger, adding Sonic Drive-In to its portfolio which also includes Arby’s and Buffalo Wild Wings, reports CNN.

Inspire paid $2.3 billion to acquire Sonic, which is almost 20 percent higher than the stock price of the company as of close of trading on Monday, showing that the company believes in Sonic despite what has been a difficult year.

Sonic has been lagging behind other bigger chains like Burger King, McDonald’s, and Wendy’s seeing its sales at new locations this year. Such has been the financial outlook for Sonic that they have launched into the weird food movement, launching a pickle juice slushy recently.

Since buying the company, Inspire has said that it won’t be bringing about any major changes to the brand or the style. Sonic will also not be brought specifically under the Inspire brand and will be operated as a completely separate company, which means consumers will see very little difference to the chain as a result of the purchase.

While $2.3 billion may seem like a lot of money, it’s not as much as Inspire paid in 2017 to acquire Buffalo Wild Wings, which it acquired in a $3 billion bid.

This news follows a trend of mergers of fast food and casual food industry, with chains struggling to go on their own and seeking a merger or a sale to keep the company afloat and keep competing in the sector, which is exactly what Sonic has found here.

Beyond just owning Arby’s and Buffalo Wild Wings, Inspire has been building its investments into the industry, gathering up interests in Auntie Anne’s, Carvel, and Jimmy John’s to get a strong footprint in the industry.

Outside of Inspire, the major European food company JAB has been building its influence in America, with Krispy Kreme and Au Bon Pan in recent bids. In 2017 JAB picked up Panera for $7.5 million, adding a second sandwich chain to its portfolio.

Other smaller deals have been happening, notably Darden, the Olive Company parent picking up Cheddar’s Scratch Kitchen after earlier dropping Red Lobster. Sonic’s competitor Burger King’s parent company, Restaurant Brands, added Popeye’s Louisiana Kitchen to its portfolio last year.

Perhaps the next target for a takeover in the industry could be Papa John’s Pizza, which has been struggling after recent battles in the ownership. That has led to speculation, including by CNN, that the company could be the next to face a takeover.</s>Arby's-owner Inspire Brands Inc said on Tuesday it would buy Sonic Corp for about US$1.57 billion in cash, adding more than 3,600 drive-in restaurants to its portfolio that includes brands such as Buffalo Wild Wings and Rusty Taco.

REUTERS: Arby's-owner Inspire Brands Inc said on Tuesday it would buy Sonic Corp for about US$1.57 billion in cash, adding more than 3,600 drive-in restaurants to its portfolio that includes brands such as Buffalo Wild Wings and Rusty Taco.

Sonic is the latest U.S. restaurant to be taken private. Zoe's Kitchen was taken private by Mediterranean restaurant chain Cava last month, while NRD Capital took Ruby Tuesday private in October last year for about US$335 million.

The deal comes as Sonic battles intense pricing competition from bigger rivals such as McDonald's Corp and Wendy's Co . The company's same-restaurant sales have fallen for at least the past two years.

Inspire's offer values Sonic at US$43.50 per share, a 19 percent premium to the stock's Monday close. Sonic's shares were trading at US$43.35.

Including debt, the deal is valued at about US$2.3 billion, the companies said.

Inspire Brands was formed by private equity firm Roark Capital as a holding company when Arby's completed the acquisition of Buffalo Wild Wings earlier this year.

Roark, which also owns bakery chain Cinnabon, bought a majority stake in Arby's from Wendy's Co in 2011 and purchased the remaining 12.3 percent last month.

Guggenheim Securities LLC is the financial adviser to Sonic, while Shearman & Sterling LLP is its legal counsel.</s>Inspire Brands, who owns Arby's, Buffalo Wild Wings and Rusty's Tacos, has bought out Sonic Drive-In for $2.3 billion.

Sonic has 3,600 restaurants across the United States and Inspire Brands says the buyout will close by the end of December.

The hamburger chain will remain based in Oklahoma City, but will run as a separate business unit within the company.

Management within Sonic will remain the same.

Inspire Brands was formed after Arby's bought out Buffalo Wild Wings earlier this year.</s>The owner of Arby's Restaurant Group has said it will buy drive-in chain Sonic Corp in a $2.3 billion transaction, including debt.

Inspire Brands, which also owns Buffalo Wild Wings and Rusty Taco, said on Tuesday that Sonic's board of directors had unanimously approved the deal, which includes about $1.57 billion in cash.

'Sonic is a highly differentiated brand and is an ideal fit for the Inspire family,' said Inspire CEO Paul Brown in a statement.

'We have tremendous respect for Sonic's exceptional team of employees and franchise owners, who have built one of the industry's most distinctive restaurant brands.'

Oklahoma City-based Sonic has about 3,500 locations in 44 states.

The iconic drive-in chain is known for its carhops on roller skates, burgers and wide selection of quirky slushies and sodas.

Inspire has offered Sonic shareholders $43.50 for each share held, a 19 per cent premium to the stock's Monday close.

Sonic's shares were trading just below the offer price at $43.30 in mid-day trading.

The deal, which is expected to close by the end of the year, will see Sonic taken private.

Including the assumption of Sonic's net debt, the deal is valued at about $2.3 billion, the companies said.

The deal values Sonic slightly higher than Shake Shack, worth $2.2 billion, and a little more than half the value of Wendy's Co, which is worth $4.1 billion.

McDonald's Corp remains the titan of fast food, with a market cap of $126.7 billion.

Inspire brands was formed by private equity firm Roark Capital as a holding company when Arby's completed the acquisition of Buffalo Wild Wings earlier this year.

Roark bought a majority stake in Arby's from Wendy's Co in 2011 and purchased the remaining 12.3 per cent last month.</s>Inspire is paying $43.50 per share cash, or $2.3 billion, for Sonic, which has 3,600 restaurants in the U.S. Inspire expects the deal to close by the end of this year.

Sonic will operate as a separate business unit within Inspire and remain based in Oklahoma City. The first Sonic opened in Oklahoma in 1953.

Inspire says Sonic’s management team will also remain in place.

Sonic earned $63.7 million in its 2017 fiscal year, which ended Aug. 31. That was down slightly from the previous two years.

Atlanta-based Inspire was formed earlier this year when Arby’s acquired the Buffalo Wild Wings chain.

Inspire said Tuesday owning multiple chains will help it share resources, including customer loyalty data and suppliers.

Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.</s>The company behind Arby's will buy drive-in burger chain Sonic in a deal announced Tuesday.

Inspire Brands, which took over Buffalo Wild Wings last year, will acquire Sonic for $2.3 billion including debt, the company said in a statement.

The purchase adds to Inspire's collection of restaurants that includes, alongside Arby's and Buffalo Wild Wings, Mexican food chain Rusty Taco.

The Sonic purchase plays into Inspire's overall strategy of acquiring distinct, dissimilar brands, the company said. Known for burgers, hot dogs and specialty drinks, Sonic brings focuses not present at Arby's or Rusty Taco while operating outside of the fast-casual realm where Buffalo Wild Wings exists.

Sonic's stock rose more than 18 percent Tuesday, CNBC reported, hitting its all-time high at $44.87 per share.

Sonic's $4.4 billion in sales last year topped well-known brands including Dairy Queen, Five Guys and Hardee's, according to Fortune, citing statistics Nation's Restaurant News, an industry journal.

More: Culver's becomes fast-food force with 'butter burgers'

“Sonic is a highly differentiated brand and is an ideal fit for the Inspire family,” Paul Brown, Inspire's CEO, said in a statement, calling Sonic "one of the industry’s most distinctive restaurant brands.”

Sonic will continue to operate independently after the sale from its Oklahoma City headquarters, according to Business Insider.

Sonic shareholders will receive $43.50 per share in cash, Inspire said in its statement, a premium of roughly 19 percent to the chain's closing stock price on Monday.

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More: Best gadgets you can find at the dollar store</s>Sonic Corp. ("Sonicâ) (NASDAQ: SONC) and Inspire Brands, Inc. ("Inspireâ) today announced that they have entered into a definitive merger agreement under which Inspire will acquire Sonic for $43.50 per share in cash in a transaction valued at approximately $2.3 billion including the assumption of Sonicâs net debt.

Inspire is a multi-brand restaurant company whose portfolio includes more than 4,700 Arbyâs, Buffalo Wild Wings, and Rusty Taco locations worldwide. Following the completion of the transaction, Sonic will be a privately-held subsidiary of Inspire and will continue to be operated as an independent brand.

The agreement, which has been unanimously approved by Sonicâs Board of Directors, represents a premium of approximately 19% per share to Sonicâs closing stock price on September 24, 2018 and a premium of approximately 21% to Sonicâs 30-day volume-weighted average price.

"Sonic is a highly differentiated brand and is an ideal fit for the Inspire family,â said Paul Brown, Chief Executive Officer of Inspire Brands. "We have tremendous respect for Sonicâs exceptional team of employees and franchise owners, who have built one of the industryâs most distinctive restaurant brands.â

"Weâre excited to build on Sonicâs momentum as we leverage our combined expertise and capabilities to better serve guests, further support team members and franchisees and drive long-term growth.â

"This value-maximizing transaction validates the actions we have taken over the last year to grow traffic and improve sales while delivering differentiated offerings and superior guest service,â said Cliff Hudson, Sonic Corp. CEO. "Our Board of Directors, taking into account the views of shareholders, conducted a comprehensive review of a wide range of strategic options to maximize shareholder value. 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.

"As one of the largest owner-operators of company-owned and franchised restaurant brands, Inspire appreciates the unique culture of collaboration between Sonic and our franchisees. Sonic franchisees are engaged in planning regarding technology, new products and marketing programs, and the team at Inspire recognizes the central role our franchisees have played, and will continue to play, in Sonicâs success. We look forward to working closely with Inspire as we continue to provide made-to-order American classics, distinctive flavors and the most personalized guest experience in our industry.â

The transaction is subject to the approval of Sonic shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals, and will close by the end of the year.

Guggenheim Securities, LLC is serving as financial advisor to Sonic and Shearman & Sterling LLP is serving as its legal counsel. White & Case LLP is serving as legal counsel to Inspire.

SONIC, America's Drive-In is the nation's largest drive-in restaurant chain serving approximately 3 million customers every day. Ninety-five percent of SONICâs more than 3,600 drive-ins are owned by local business men and women. For 65 years, SONIC has delighted guests with signature menu items, 1.3 million drink combinations and friendly service by iconic Carhops. Since the 2009 launch of SONIC's Limeades for Learning philanthropic campaign in partnership with DonorsChoose.org, SONIC has donated $10.4 million to public school teachers nationwide to fund essential learning materials and innovative teaching resources to inspire creativity and learning in their students. To learn more about Sonic Corp. (NASDAQ/NM: SONC), please visit sonicdrivein.com and please visit or follow us on Facebook, Twitter and Instagram. To learn more about SONIC's Limeades for Learning, please visit LimeadesforLearning.com.

Inspire Brands, headquartered in Atlanta, Ga, is a multi-brand restaurant company whose portfolio includes more than 4,700 Arbyâs, Buffalo Wild Wings, and Rusty Taco locations worldwide. The company is majority-owned by affiliates of Roark and was founded in 2018. For more information, visit InspireBrands.com

Since inception, affiliates of Roark have invested in 65 franchise/multi-unit brands, which collectively generate $32 billion in annual system revenues from 32,000 locations in 50 states and 81 countries. For more information, please visit www.roarkcapital.com.

This communication contains "forward-looking statementsâ within the meaning of the U.S. federal securities laws. Such statements include statements concerning anticipated future events and expectations that are not historical facts. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Actual results may vary materially from those expressed or implied by forward-looking statements based on a number of factors, including, without limitation: (1) risks related to the consummation of the merger, including the risks that (a) the merger may not be consummated within the anticipated time period, or at all, (b) the parties may fail to obtain shareholder approval of the merger agreement, (c) the parties may fail to secure the termination or expiration of any waiting period applicable under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (d) other conditions to the consummation of the merger under the merger agreement may not be satisfied, and (e) the significant limitations on remedies contained in the merger agreement may limit or entirely prevent Sonic Corp. from specifically enforcing Inspire Brands, Inc.âs obligations under the merger agreement or recovering damages for any breach by Inspire Brands, Inc.; (2) the effects that any termination of the merger agreement may have on Sonic Corp. or its business, including the risks that (a) Sonic Corp.âs stock price may decline significantly if the merger is not completed, (b) the merger agreement may be terminated in circumstances requiring Sonic Corp. to pay Inspire Brands, Inc. a termination fee, or (c) the circumstances of the termination, including the possible imposition of a 12-month tail period during which the termination fee could be payable upon certain subsequent transactions, may have a chilling effect on alternatives to the merger; (3) the effects that the announcement or pendency of the merger may have on Sonic Corp. and its business, including the risks that as a result (a) Sonic Corp.âs business, operating results or stock price may suffer, (b) Sonic Corp.âs current plans and operations may be disrupted, (c) Sonic Corpâs ability to retain or recruit key employees may be adversely affected, (d) Sonic Corp.âs business relationships (including, customers, franchisees and suppliers) may be adversely affected, or (e) Sonic Corpâs managementâs or employeesâ attention may be diverted from other important matters; (4) the effect of limitations that the merger agreement places on Sonic Corpâs ability to operate its business, return capital to shareholders or engage in alternative transactions; (5) the nature, cost and outcome of pending and future litigation and other legal proceedings, including any such proceedings related to the merger and instituted against Sonic Corp.âs and others; (6) the risk that the merger and related transactions may involve unexpected costs, liabilities or delays; (7) other economic, business, competitive, legal, regulatory, and/or tax factors; and (8) other factors described under the heading "Risk Factorsâ in Part I, Item 1A of Sonic Corp.âs Annual Report on Form 10-K for the fiscal year ended August 31, 2017, as updated or supplemented by subsequent reports that Sonic Corp. has filed or files with the SEC. Potential investors, shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Neither Inspire Brands, Inc. nor Sonic Corp. assumes any obligation to publicly update any forward-looking statement after it is made, whether as a result of new information, future events or otherwise, except as required by law.

ADDITIONAL INFORMATION AND WHERE TO FIND IT

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This communication may be deemed to be solicitation material in respect of the proposed merger between Inspire Brands, Inc. and Sonic Corp. In connection with the proposed transaction, Sonic Corp. plans to file a proxy statement with the Securities and Exchange Commission ("SECâ). SHAREHOLDERS OF SONIC CORP. ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO ANY DOCUMENTS INCORPORATED BY REFERENCE THEREIN) AND OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE PROPOSED TRANSACTION THAT SONIC CORP. WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. Shareholders and investors will be able to obtain free copies of the proxy statement and other relevant materials (when they become available) and other documents filed by Sonic Corp. at the SECâs web site at www.sec.gov. Copies of the proxy statement (when they become available) and the filings that will be incorporated by reference therein may also be obtained, without charge, at https://ir.sonicdrivein.com/ or by contacting Sonic Corp.âs Investor Relations at (405) 225-5000.

Sonic Corp. and its directors, executive officers and certain employees may be deemed, under SEC rules, to be participants in the solicitation of proxies in respect of the proposed merger. Information regarding Sonic Corp.âs directors and executive officers is available in its proxy statement filed with the SEC on December 18, 2017. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC (when they become available). These documents can be obtained free of charge from the sources indicated above.</s>Drive-In fast food chain Sonic, which has 3,600 locations, has been acquired by Inspire Brands which owns Arby’s and Buffalo Wild Wings. Recently, Sonic has been facing intense competition from fast food giants, McDonald's, Burger King and Wendy's while Sonic has had declining sales this year. This recent transaction continues a consolidation trend, whereby the franchised food sector, which includes fast food and fast casual chains have been acquired by private equity firms.

The fast food or QSR franchise sector dominates the industry that provides quickly served food for customers. This totally U.S. creation is dominated by well -known brand names like McDonald’s, Subway, Wendy’s, Burger King and Chick-fil-A. In a recent study conducted by research firm Franchise Grade, the franchised fast-food sector accounted for over $50 billion invested by franchisees and comprised 34% of franchised outlets within the Franchise Grade database of 2,500 U.S. companies that franchise.

For PE firms and companies that seek a secure investment opportunity, the fast food sector, primarily comprised of franchise owners, can provide stability and growth. Franchised fast food chains include base menus like hamburgers, pizza, and chicken to fast-growing ethnic franchises featuring Asian, Mexican and Middle Eastern menus. There is a franchise requirement many fast-food franchisors have, whereby the brands require a franchisee to open multiple locations in a specific state or territory. This strategy ensures that the franchise will have ample capital, build brand awareness and benefit from economies of scale. For the multi-unit franchise investor, fast-food can provide a secure investment in a well-known brand and add diversity to an existing franchisee portfolio. Many of the largest fast-food franchises are held by franchise companies that generate millions of dollars in annual revenues. For example, companies that franchise many fast-food locations include Cavelli Enterprises that operates hundreds of Panera Bread franchises, publicly traded Carrols Restaurant Group, Inc. franchisee of over 650 Burger Kings restaurants and Flynn Restaurant Group which operates 450 Applebees and over 115 Taco Bells. There are other multi-unit franchise firms that operate large numbers of fast-food brands.

Fast food franchises systems appeal to PE investors for a number of reasons:
• The contractual commitment of the franchise network coupled with a financial stake in the franchise
• Ability to administer complementary brands through economies of scale

Fast food chains will undergo changes in the years ahead from customers seeking more healthy menus, the appeal, and growth of ethnic franchise concepts, the introduction of technology such as kiosk ordering and meeting the expectations of millennials. However, despite these challenges consolidation will likely continue.

The fast-food sector will continue to consolidate as acquirers recognize the benefits available from group purchasing, multi-unit franchise ownership, economies of scale and stable consumer demand for quick served meals.
Inspire Brands announces its purchase of fast food chain Sonic Drive-In for US$2.3 billion.