The deal includes debt and is subject to targets in the sandwich giant’s financial performance, according to Reuters, and comes on the heels of Subway announcing its 10th consecutive quarter of positive same store sales.
News of the deal first came to light earlier this week.
Subway says it will ‘continue to execute its strategy with a focus on sales growth, menu innovation, modernization of restaurants, overall guest experience improvements, and international expansion’ following the sale.
“This transaction reflects Subway's long-term growth potential, and the substantial value of our brand and our franchisees around the world,” says John Chidsey, CEO of Subway.
“Subway has a bright future with Roark, and we are committed to continuing to focus on a win-win-win approach for our franchisees, our guests and our employees.”
The deal marks the conclusion of a drawn-out auction that started in February and attracted interest from several private equity firms, including a rival bidding group led by Stonegate owner TDR Capital and Sycamore Partners.
Founded in 1965 by 17-year-old Fred DeLuca and his family friend Buck, Subway has been owned by the founding families since its first restaurant opened as ‘Pete’s Super Submarines’ in Bridgeport, Connecticut.
Roark primarily invests in the franchised consumer and business services sectors. It has invested in Inspire Brands, which is the owner of Arby's, Baskin-Robbins, Buffalo Wild Wings and Dunkin' among others.
J.P. Morgan is advising on the deal and Sullivan & Cromwell LLP is serving as legal counsel to Subway. Completion is subject to regulatory approvals and customary closing conditions.