Sonic To Be Acquired By Inspire Brands, Owner of Arby's And Buffalo Wild Wings

Burger chain Sonic Corporation SONC reached an agreement to sell itself to Inspire Brands for $2.3 billion, or $43.50 per share.

What Happened

Sonic, best known for its drive-in concept with unique menu items like a pickle juice slush, agreed to sell itself to Inspire, a multi-brand restaurant company. Some of the other brands under Inspire's umbrella include Arby's, Rusty Taco and most recently, Buffalo Wild Wings.

Sonic's board has already approved the deal, which implies a 19-percent premium to Monday's closing price and a 21-percent premium to the stock's 30-day volume-weighted average price.

Why It's Important

Sonic CEO Cliff Hudson said in a press release the transaction "delivers significant, immediate and certain value to Sonic shareholders." Under the ownership of a private entity, the restaurant chain will be better positioned to offer a better customer experience and offer important benefits to franchisees and employees.

"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," said Paul Brown, Chief Executive Officer of Inspire Brands.

What's Next

Sonic will operate as an independent brand under Inspire's umbrella and is expected to close by the end of the year, subject to the approval of Sonic shareholders and regulatory requirements.

Sonic's stock was trading below $25 per share for most of the first half of 2018 so an acquisition at a price tag of $43.50 is a "home run" deal for many investors, CNBC's Jim Cramer said Tuesday morning. The attractive deal comes within the restaurant sector, which has been among the most under pressured groups.

"These are the kind of deals that make you say, 'wait a second, I don't know if I want to sell stocks,'" Cramer said. "I don't know if I want to sell stocks if we are getting this kind of takeover."

Sonic was trading up nearly 19 percent to $43.48 at time of publication. Shake Shack Inc SHAK was up more than 5 percent in sympathy.

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Photo credit: Belinda Hankins Miller, via Wikimedia Commons