Subway agreed to sell itself to private equity firm Roark Capital, the sandwich chain announced on Thursday.
Roark beat out a late challenge from a rival bidding group led by TDR Capital and Sycamore Partners, which also submitted a final bid of more than $9 billion, Reuters reported, citing people familiar with the matter.
The private equity firm already has several noted restaurant brands in its portfolio under Inspire Brands, including Arby’s, Buffalo Wild Wings and Jimmy John’s.
Subway has been owned by the families of its founders for nearly six decades, but in February announced it was exploring a possible sale ,drawing interest from private equity firms including Roark, Advent International, TDR Capital and TPG as well as Goldman Sachs’ asset management arm.
The chain had then hoped to fetch more than $10 billion, owing to its strong brand and international business. But the buyout firms countered that it was worth less as they deemed its U.S. business saturated.
Subway has more than 37,000 restaurants across more than 100 countries.
“This transaction reflects Subway’s long-term growth potential, and the substantial value of our brand and our franchisees around the world,” Subway CEO John Chidsey said.
Subway had for several years struggled with competition from rivals until it revamped its menu and increased marketing spend in 2021.
The sandwich chain’s same-store sales in North America rose 9.3% in the first half of 2023.
JPMorgan will act as financial adviser and Sullivan & Cromwell LLP is serving as legal counsel to Subway.
Timing of the purchase is subject to regulatory approvals and customary closing conditions.
Subway was founded in 1965 by Fred DeLuca and Peter Buck, whose first sandwich shop opened in Bridgeport, Connecticut, as Pete’s Super Submarines.
FOX Business’ Breck Dumas and Reuters contributed to this report