Board members from drive-in burger, hot dog and ice cream chain Sonic unanimously agreed on Tuesday to a $2.3 billion offer from Atlanta-based restaurant conglomerate Inspire Brands Inc.
If the deal closes, Sonic will join Inspire’s privately-held family of restaurant brands, which so far include Arby’s, Rusty Taco, and Buffalo Wild Wings.
The acquisition is the first of what could be up to ten restaurant chain purchases from Inspire. Chief executive Paul Brown said at the start of the year—about two months after Inspire was formed—that the restaurant group intended to own brands spanning “multiple occasions, up and down the spectrum.”
Hidden in the industry lingo was a plan largely unique to the dining sector. Most restaurant conglomerates tend to focus on one area—only fast food or only casual dining—whereas Brown’s intention is to own properties serving different markets.
“We believe the time is right to create a different kind of restaurant company,” Brown told the Wall Street Journal in February. The reasoning behind the change-up is somewhat explained by his background: Brown comes from the hospitality sector. During his time at Hilton Worldwide, he saw the benefits of having a diversified portfolio of budget and luxury resorts that all ran under one rewards program. His hope is to create something similar at Inspire.
“Sonic is a highly differentiated brand and is an ideal fit for the Inspire family,” said Brown in a statement Tuesday. “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.”
Over 90 percent of Sonic’s more than 3,500 locations are owned by franchisees. Buffalo Wild Wings, by comparison, was more evenly split between franchised and corporate-owned locations at the time of its sale last November. There were roughly 1,200 Buffalo Wild Wings restaurants during that time.
Yet, Buffalo Wild Wings fetched $600 million more than Sonic. Unique to the Sonic deal, however, is the absorption of Sonic’s debt. How much debt Inspire is taking on, though, was not disclosed.