PE firm Roark Capital Group has won the battle to take over US sandwich chain Subway after fending off a late bid from a rival group led by TDR Capital and Sycamore Partners. According to Bloomberg, Subway's cash flow will need to reach certain milestones after the deal closes in order to receive the full consideration. Excluding the earnout payment, the transaction is worth $8.95 billion.

Founded in 1965 in Connecticut, Subway has remained privately owned and currently operates approximately 37,000 sandwich shops worldwide, including about 21,000 in the United States. According to market research firm Technomic, the chain's U.S. sales reached $9.4 billion in 2021. Subway has been operating in the Czech Republic since 2004. It has 11 locations in Prague, Brno, Ostrava and Olomouc.

Subway has become one of the largest restaurant chains in the world by rapidly expanding its locations. Its global sales reached a record $18 billion in 2012, but have declined over the years since. However, last October, the sandwich chain reported that its third-quarter sales grew 8.4% compared to the same period in 2021. The company attributed the increase in sales to menu changes, restaurant renovations and improved online ordering.

With this acquisition, Roark Capital solidifies its position as a major player among private investors in U.S. restaurant franchises. Roark Capital-backed Inspire Brands acquired Dunkin' Brands Group for $11.3 billion in 2020.