Subway Acquisition: On Thursday, sources stated TDR Capital and Sycamore Partners are discussing buying Subway jointly. Sources indicate TDR and Sycamore may not match the company’s pricing guidelines. If the transaction goes through, TDR and Sycamore may offer Subway almost $9 billion. Another Roark Capital-led consortium wants to purchase the firm. This adds excitement.
One source said potential purchasers are doing their due diligence. Subway may cease selling at the end of the month.
Advent International, a private equity firm collaborating with Goldman Sachs Asset Management to sell Subway, may have withdrawn. We are still determining whether Goldman Sachs will join one of the other projects. Bloomberg News broke the Advent news.
Sources said that Roark Capital controls Jimmy John’s, which raises problems. Even though their customers and partners are the same, Roark feels their marketing strategy will succeed.
Champaign, Illinois, founded Jimmy John’s. Their 2,600+ establishments are in 43 states. Subway, established in Milford, Connecticut, has over 37,000 stores in 100 countries.
Advent, Goldman Sachs, Sycamore, and Subway all declined to comment.
Since 1965, when 17-year-old Fred DeLuca and his family friend Peter Buck founded Pete’s Super Submarines in Bridgeport, Connecticut, the same families have operated Subway.
In recent months, the Milford, Connecticut-based company has changed its operations. Old decorations and how $5 foot-long sandwich purchases damaged partners’ revenue were fixed. Subway changed its menu and launched a major marketing campaign in 2021 to enhance its status—this increased sales.
Since 2016, Subway has shuttered numerous US stores intentionally. They aim to cease relying on single-shop partners. These enterprises are owned by struggling families. In the first half of 2023, the company’s revenues from long-standing stores increased by 9.85%. We estimate Subway earned $800 million last year before interest, taxes, depreciation, and amortization.
JPMorgan Chase & Co. aids Subway. They’re offering $5 billion to assist private equity companies in purchasing the business. Reuters broke this news.