Arby’s owner to buy Buffalo Wild Wings

Private equity firms are making moves to consolidate the fast-casual dining sector. After months of speculation, Buffalo Wild Wings announced it is being acquired by Roark Capital Group, the majority owner of Arby's, for $2.4 billion.

A spike in food and labor costs and increased competition in the fast-casual dining market has hurt Buffalo Wild Wings profits, NPD Group restaurant industry analyst Bonnie Riggs told USA Today. Buffalo Wild Wings had been a "star performer" in the sector for years but recently "lost their value proposition to families with kids," she said. Buffalo Wild Wings will become a unit of Roark's Arby's and operate as an independent brand. According to CNBC, Wendy's owns about 18.5 percent of Arby's, with its stake valued at around $325.9 million, as of the third quarter of this year.

Observers say Arby’s management has successfully turned that business around in recent years and could apply lessons learned to helping Buffalo Wild Wings boost sales. "Buffalo Wild Wings is one of the most distinctive and successful entertainment and casual dining restaurant companies in America,” Arby's CEO Paul Brown said in a press release. “We look forward to leveraging the combined strengths of both organizations into a truly differentiated and transformative multi-brand restaurant company.”

Minneapolis-based Buffalo Wild Wings has more than 1,250 locations in 10 countries. Arby's has more than 3,300 in seven countries.