Hedge Fund Makes Offer to Acquire Full Control of Driven Brands

ADW Capital Management, a Miami Beach, Florida-based hedge fund management firm, announced on Thursday that it has made an all-cash offer to buy Driven Brands at $18 per share—a figure that would value the company at about $3 billion and is 41% above the previous day’s closing share price of $12.74.

ADW Capital currently holds a 3.7% stake in Driven Brands, the parent company of Take 5 Oil Change and a portfolio of other automotive aftermarket brands. Private equity firm Roark Capital is the current majority owner of Driven.

On Thursday, ADW sent an open letter to the Driven Brands Holdings board of directors and to Roark Capital Group, presenting its offer. ADW expressed disappointment that the parties declined to engage in a strategic review process following a previous communication from ADW on March 26, adding that Driven Brands is “materially undervalued due to self-inflicted structural, capital allocation, and governance failures” and that Roark is focusing on positioning its larger restaurant platforms at the expense of Driven.

“Is this how Roark treats its private investors who ‘lock-up’ their capital for 10, 15, or 20 years?” ADW Capital managing member Adam Wyden wrote in its letter. “Is this the type of behavior that engenders goodwill with future public market investors? It is not lost on us that Roark is focused on preparing Inspired Brands to go public and that other large assets like Subway will eventually need to find their way into passive liquid markets as well.

“We ask both Roark and the (c)ompany, is this how public minority investors should expect to be treated by Roark controlled entities in the future?”

ADW Capital has requested that representatives of Driven Brands meet with the firm by May 15 to discuss the proposal.