Activist Hedge Fund Makes Nearly $3 Billion Offer to Buy Meineke Owner
ADW Capital says private-equity firm Roark Capital mismanaging Driven Brands and offers roughly 40% premium to buy the company
- Activist hedge fund ADW Capital is offering $18 a share to buy Meineke owner Driven Brands for nearly $3 billion.
- ADW Capital, which owns a 3.7% stake, aims to overhaul Driven Brands and remove its majority owner, Roark Capital.
- ADW Capital stated it is “highly confident” it can obtain financing for the transaction, subject to due diligence.
Adam Wyden’s activist hedge fund is offering to buy Meineke owner Driven Brands for nearly $3 billion, according to a letter that was viewed by The Wall Street Journal.
The details
ADW Capital is offering $18 a share to buy all Driven’s shares outstanding, according to the letter, a roughly 40% premium to its recent stock price.
The move is part of ADW’s effort to overhaul the automotive services provider and to remove private-equity firm Roark Capital, which is Driven’s majority owner. Driven owns brands including Meineke and Auto Glass Now.
The hedge fund, which has a roughly 3.7% stake in Driven, had last month called on the company to launch a strategic review process and to explore a sale or break up, the Journal reported.
On Thursday, ADW sent a letter saying it has met with financial advisers and potential financing sources and is “highly confident” that it can obtain financing to complete the transaction, which would be subject to due diligence.
Wyden in an interview said he has spoken with large banks, middle-market private-equity firms and family offices that have expressed interest in participating.
The context
ADW said that Driven and Roark hadn’t “even acknowledged the receipt of our prior letter” and that Driven is suffering from “self-inflicted structural, capital allocation and governance failures.”
It laid much of the blame, once again, on Roark, saying it was focused on building out a restaurant platform that it plans to take public and neglecting Driven.
Roark bought Driven in 2015 and took it public in 2021. Roark owns about 60% of Driven’s shares, which through Wednesday’s close were down over 60% from their peak shortly after the IPO.
The company hasn’t commented on Wyden’s earlier letter.
In February, Driven disclosed “material errors” in its financial statements and “material weaknesses” in internal controls over financial reporting.
Last month, ADW estimated that selling the whole company to a competitor or another private-equity firm would result in value north of $30 a share for Driven shareholders.
Wyden said he is offering $18 a share and would then have to improve the business, which could involve cost cuts or selling parts.
He said that if Driven or Roark thinks the company can sell for more than $18 a share right now, they should hire a bank to begin that process.