STRATEGIC PARTNERS
February 6, 2018
The $2.9 billion acquisition of Buffalo Wild Wings by Arby's Restaurant Group is now complete, which puts Arby's CEO Paul Brown in the top position of the newly formed company, Inspire Brands.
It also means Buffalo Wild Wings CEO Sally Smith is out of a job. The woman, who built the wing concept into the 1,200-unit chain that it is today and announced her plan to retire last year during an investor meeting, received about $5 million in the deal, according to the Albuquerque Business Journal.
Smith, who also serves on the boards of several other organizations, including Allina Health System, won't spend her retirement relaxing, however, as she already has a new gig. She's joining the board of Twin Cities tech company, Digi International Inc., which generated about $181 million in revenue during its 2017 fiscal year, according to a company press release.
Digi, which produces modems and routers, said in a statement that Smith's restaurant industry expertise will benefit the company's expanding "smart solutions" business, which makes products that monitor perishable goods like food.
In her 21 years with BWW, Smith oversaw its growth from $55 million to about $2 billion in annual sales. It went public in 2003, and shares soared to 15 times their initial value. Growth has stalled, however, over the past couple of years, which sparked one of its investors — Marcato Capital Management — a San Francisco-based investment firm that now owns 10 percent of the chain's stock, to call for a change of leadership and to transition toward more franchise ownership.
Marcato Managing Partner Mick McGuire publicly claimed that the chain gave inaccurate information in its definitive proxy materials filed on April 21, calling analysis "sloppy and self-serving." He also said Buffalo Wild Wings denied the allegations, but during the chain's June investor meeting Marcato won three seats on the restaurant chain's board of directors shortly after Smith announced her retirement.
"We are very pleased that our fellow Buffalo Wild Wings shareholders recognize that additional change on the board is warranted to return Buffalo Wild Wings to a path of growth and long-term value creation," McGuire said in a June statement. "We will bring the fresh perspectives, restaurant-industry expertise, and oversight the Buffalo Wild Wings board needs to spearhead improvements at the company."
Inspire Brands includes more than 4,600 company-owned and franchised restaurants with more than 150,000 team members across 15 countries. The combined 2017 global system sales of its restaurants exceeds $7.6 billion. Roark Capital's Neal Aronson is co-founder of the business that will be headquartered in Atlanta but will also operate a support center in Minneapolis, Minneapolis, according to a news release.
"We believe the time is right to create a different kind of restaurant company — one with a broad portfolio of distinct brands across a full spectrum of restaurant occasions," Brown said in the release. "Our goal is to build an organization that leverages the benefits of scale, not only to save cost, but also to enable outsized investments in long-term growth initiatives."
