Wendy's to make almost $450 million on Buffalo Wild Wings acquisition

Burger chain Wendy's stands to gain nearly $450 million following the acquisition of Buffalo Wild Wings by Roark Capital Group.

On Tuesday, the private equity firm said it would buy the chicken wing chain for $2.4 billion, or $157 per share. Buffalo Wild Wings will become a unit of Roark's Arby's and operate as an independent brand.

Currently, Wendy's owns about 18.5 percent of Arby's, with their stake valued at around $325.9 million, as of the third quarter this year.

"This implies a value of $1.76 billion for Arby's," Stifel analyst Chris O'Cull wrote in a research note Tuesday. "Following the acquisition of BWLD, Arby's Restaurant Group excluding debt would theoretically be valued at roughly $4.2 billion."

Wendy's stake would then be valued at $775 million before tax, O'Cull said. And that is a big boon for the burger chain.

"Prior to the acquisition, the Arby's stake made up 9.8 percent of WEN's market cap," he wrote in a research note Tuesday. "Following the acquisition, the stake would make up 23.4 percent of WEN's market cap. If Wendy's were able to monetize its stake, then we estimate the net benefit (zero carrying value) would reduce the company's enterprise value/EBITDA [over the next 12 months] to 12.5x from 13.7x."

Last quarter, Wendy's sales were battered by increased competition, lower grocery prices and hurricanes that hit traffic at restaurants. This led the burger chain to cut its full-year adjusted earnings per share forecast.

The company trimmed its full-year adjusted profit forecast to a range of 43 cents to 45 cents per share for full-year, from a prior range of 45 cents to 47 cents per share.

It also trimmed the higher end of its North American comparable-store sales forecast for the year to 2 percent to 2.5 percent from 2 percent to 3 percent.

Wendy's shares gained about 2.5 percent Tuesday. But the stock is only up about 3.7 percent in the year-to-date period.