Arby's, a fast-food chain known for roast-beef sandwiches, is gobbling up chicken-wing chain Buffalo Wild Wings for $2.4 billion.
Arby's Restaurant Group said Tuesday that it will pay $157 per share for Buffalo Wild Wings (BWLD), representing a 7 percent premium to Buffalo Wild Wings's Monday closing price of $146.40. Arby's, which is majority owned by private-equity firm Roark Capital Group, said the investor is committed to the deal.
The companies put the transaction's value at $2.9 billion, including debt. Once the deal closes Buffalo Wild Wings will become a privately held subsidiary of Arby's and will continue to operate as an independent brand. The acquisition comes as Buffalo Wild Wings struggles with the rising cost of chicken wings and a consumer shift away from casual-dining restaurants in favor of cheaper options.
"Buffalo Wild Wings is one of the most distinctive and successful entertainment and casual dining restaurant companies in America," said Paul Brown, CEO of Arby's Restaurant Group, in a statement.
The deal is expected to close in 2018's first quarter. It still needs the approval of Buffalo Wild Wings shareholders. After the acquisition is completed, Buffalo Wild Wings will operate as an independent brand, the companies said.
Shares of Buffalo Wild Wings jumped nearly 6 percent in premarket trading.