The Inspire Brands profile has just got a little bit bigger, adding Sonic Drive-In to its portfolio which also includes Arby’s and Buffalo Wild Wings, reports CNN.
Inspire paid $2.3 billion to acquire Sonic, which is almost 20 percent higher than the stock price of the company as of close of trading on Monday, showing that the company believes in Sonic despite what has been a difficult year.
Sonic has been lagging behind other bigger chains like Burger King, McDonald’s, and Wendy’s seeing its sales at new locations this year. Such has been the financial outlook for Sonic that they have launched into the weird food movement, launching a pickle juice slushy recently.
Since buying the company, Inspire has said that it won’t be bringing about any major changes to the brand or the style. Sonic will also not be brought specifically under the Inspire brand and will be operated as a completely separate company, which means consumers will see very little difference to the chain as a result of the purchase.
While $2.3 billion may seem like a lot of money, it’s not as much as Inspire paid in 2017 to acquire Buffalo Wild Wings, which it acquired in a $3 billion bid.
New combo in the fast-food arena … Arby's, Buffalo Wild Wings and now Sonic after $2.3B deal. https://t.co/ywhJzpfgxT
— AP Business News (@APBusiness) September 25, 2018
This news follows a trend of mergers of fast food and casual food industry, with chains struggling to go on their own and seeking a merger or a sale to keep the company afloat and keep competing in the sector, which is exactly what Sonic has found here.
Beyond just owning Arby’s and Buffalo Wild Wings, Inspire has been building its investments into the industry, gathering up interests in Auntie Anne’s, Carvel, and Jimmy John’s to get a strong footprint in the industry.
Outside of Inspire, the major European food company JAB has been building its influence in America, with Krispy Kreme and Au Bon Pan in recent bids. In 2017 JAB picked up Panera for $7.5 million, adding a second sandwich chain to its portfolio.
Other smaller deals have been happening, notably Darden, the Olive Company parent picking up Cheddar’s Scratch Kitchen after earlier dropping Red Lobster. Sonic’s competitor Burger King’s parent company, Restaurant Brands, added Popeye’s Louisiana Kitchen to its portfolio last year.
Perhaps the next target for a takeover in the industry could be Papa John’s Pizza, which has been struggling after recent battles in the ownership. That has led to speculation, including by CNN, that the company could be the next to face a takeover.