Today, buyout news of the popular fast-food chain, Sonic, sent shares of the company soaring.
Inspire Brands is now adding on a fourth chain which is more fast-food oriented like its Arby’s chain. Sonic Corporation (NASDAQ:SONC), better known as Sonic, is set to be the newest member of the Inspire Brands chain portfolio.
The company is set to purchase Sonic Corporation pending shareholder approval for the tune of $1.57 billion, or $43.50 a share. With Sonic’s current debt factored in the deal is valued at $2.3 billion. The offer of $43.50 a share was a 21% premium to SONC’s 30-day moving average price.
Inspire Brands is the restaurant-chain focused parent company responsible for the likes of Arby’s, Buffalo Wild Wings, and Rusty Taco. The company boasts a portfolio of “more than 4,700” restaurants across the globe through company-owned and franchise operated establishments.
Sonic has attacked the fast-food market by providing a unique experience at their locations that is not offered by other competitors such as McDonald’s. This coupled with their unique food offerings that change over time and with the seasons, Sonic has established themselves in the fast-food industry.
There are currently 3608 Sonic Drive-in restaurants in the United States. The company reported a rather weak past few quarters with expectations of minimal earnings per share growth and possibly flat same-store sale growth for the fiscal year ending in August.
The news of the buy-out has sent the stock soaring to highs of 22% today. Shares of SONC closed yesterday at $36.61 a share and have hit highs of $43.36 a share today.
This is possibly one of the better case scenarios for shareholders of Sonic as the brand has not been able to show growth comparative to its competitors lately. Inspire Brands has a track record of turning around struggling fast-food brands, as they already did with Arby’s.
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