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Farewell to Buffalo Wild Wings

The financial press and talking heads love a good merger and acquisition story.

But not all M&A’s are created equal. Some are great, make sense, and have real upside.

Amazon (NASDAQ: AMZN) buys Whole Foods earlier this year for $13.7 billion and gets retail footprint and an avenue into high-end foods.

Then there’s the recent news of Arby’s acquisition of Buffalo Wild Wings (NASDAQ: BWLD).

Roark Capital, the parent company of Arby’s, Auntie Anne’s, Cinnabon, Meineke Car Care and others announced Tuesday last week that it had agreed to buy BWLD for $2.4 billion or $157 per share.

The herd moved as expected on the news. BWLD stock saw a nice bump over the past week rising almost 10% since November 22.

Roark’s move here, via Arby’s, is buy a flailing business and try to turn it around. Or burn it to the ground if they fail.

Here’s USA Today quoting restaurant industry analyst Bonnie Riggs on BWLD, saying the company, “lost their value proposition to families with kids.” Never a good sign.

BWLD, a once thriving food chain, has been a sack of dead meat in 2017. Shares tanked in the last six months ahead of the acquisition buzz.

BWLD chart

In the end, Roark Capital adds another dying brand to an already lackluster lineup of struggling brands.

True, they helped save Arby’s from the brink of implosion. But one lucky strike doesn’t mean another.

The silver lining? When the ink dries on the deal, BWLD will no longer be a publicly traded company. BWLD’s latest earnings were lackluster. The company’s drowning in debt.

One less black hole of a faltering restaurant stock to suck up investor dollars.

The important point is that the landscape of casual dining has drastically changed.

Other options like Panera Bread and Chipotle now dominate the quick service casual food industry.

Add in a younger generation’s taste for more eclectic dining experiences and you have the final nail in the coffin for an entire industry of eateries that once dominated every shopping mall parking lot in America.

Don’t buy all the private equity hype over Roark Capital’s stable of restaurants. They did investors everywhere a favor by taking another doomed business private.

Turning to the markets this morning…

Market Rundown for Wed., November 29

S&P 500 futures are up 2.50 at 2,627.04.

Oil’s up slightly at $58.95. Gold goes for $1,292.80.

Monumental moment. Bitcoin’s cracked $10,000, and nearly $11,000, sitting at $10,965.45.

What to say about Bitcoin at this point.

Some guy invented something on the internet. It has scarcity. And people talk about it in contrast to the “failing” U.S. dollar, fiat currency, and all the rest.

This invention races higher day by day. The arguments never end. There’s rich folks today who were not rich folks a year ago, or even six months ago.

Let us all hope this ends well. Time will tell.

Leave a comment below.

Talk with you again on Friday.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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Aaron Gentzler

Aaron Gentzler is the Publisher of Seven Figure Publishing. He's been researching and writing about technology and markets for over a decade and is a graduate of Penn State and Johns Hopkins.

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