Sonic Corp. (NASDAQ: SONC) shares jumped on Tuesday after it was announced that the burger chain would be acquired by the privately held Inspire Brands. The transaction is subject to the approval of Sonic shareholders and customary closing conditions. It is expected to close by the end of the year.
Under the terms of the deal, Inspire will acquire Sonic for $43.50 per share in cash in a transaction valued at approximately $2.3 billion, including the assumption of Sonic’s net debt.
The agreement was unanimously approved by Sonic’s board of directors, and it represents a premium of roughly 19% per share to Sonic’s closing stock price on September 24, 2018, and a premium of about 21% to Sonic’s 30-day volume-weighted average price.
Inspire is a multi-brand restaurant company with a portfolio that includes more than 4,700 Arby’s, 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.
Cliff Hudson, Sonic CEO, commented:
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 Sonic’s 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.
Excluding Tuesday’s move, Sonic has outperformed the broad markets, with its stock up about 49% in the past 52 weeks. In just 2018 alone, the stock is up about 33%.
Shares of Sonic were last seen up about 18% at $43.25 on Tuesday, with a consensus analyst price target of $36.00 and a 52-week range of $23.22 to $44.87.
24/7 Wall St.Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
