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SONIC
to be Acquired by
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Inspire
Brands for $2.3 Billion
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Atlanta, GA & Oklahoma
City, OK – September 2018 / Newsmaker Alert / SONIC
Corp. and Inspire Brands,
Inc. 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 SONIC’s net debt.
Inspire
is a multi-brand restaurant company whose portfolio 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.
The
agreement, which has been unanimously approved by SONIC’s Board of Directors,
represents a premium of approximately 19% per share to SONIC’s closing
stock price on September 24, 2018 and a premium of approximately 21% to
SONIC’s 30-day volume-weighted average price. 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
is a highly differentiated brand and is an ideal fit for the Inspire family,”
said Paul Brown, Chief Executive Officer of Inspire Brands. “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.”
“We’re
excited to build on SONIC’s momentum as we leverage our combined expertise
and capabilities to better serve guests, further support team members and
franchisees and drive long-term growth.”
“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,” 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 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.”
Transaction
Details
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.
Advisors
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.
About
SONIC
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 SONIC’s
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.
About
Inspire Brands
Inspire
Brands, headquartered in Atlanta, Ga, is a multi-brand restaurant company
whose portfolio includes more than 4,700 Arby’s, 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.
About
Roark
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 RoarkCapital.com.
Cautionary
Note Regarding Forward-Looking Statements
This
communication contains “forward-looking statements” 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.’s 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.’s 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.’s business, operating results
or stock price may suffer, (b) SONIC Corp.’s current plans and operations
may be disrupted, (c) SONIC Corp’s ability to retain or recruit key employees
may be adversely affected, (d) SONIC Corp.’s business relationships (including,
customers, franchisees and suppliers) may be adversely affected, or (e)
SONIC Corp’s management’s or employees’ attention may be diverted from
other important matters; (4) the effect of limitations that the merger
agreement places on SONIC Corp’s 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.’s 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 Factors” in Part
I, Item 1A of SONIC Corp.’s 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 (“SEC”). 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 SEC’s 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 ir.sonicdrivein.com
or by contacting SONIC Corp.’s Investor Relations at 405-225-5000.
Participants
In Solicitation
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.’s
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.
Contacts:
For
SONIC Corp.
Christi
Woodworth
405-225-5600
VP
of Public Relations
or
Joele
Frank, Wilkinson Brimmer Katcher
Matthew
Sherman / Andrew Siegel / Aaron Palash, 212-355-4449
or
For
Inspire Brands
Inspire
Brands
Christopher
Fuller
Head
of Communications |