Driven Brands Holdings saw a sharp rise in its share price Thursday after a report indicated that ADW Capital has put forward an acquisition proposal valued at nearly $3 billion. The activist hedge fund is offering $18 per share to purchase all outstanding Driven Brands stock, according to a letter viewed by the publication that initially reported the approach.
The $18-per-share proposal equates to roughly a 40% premium over Driven Brands' recent trading level, the correspondence said. Market reaction was immediate, with the company's shares jumping in response to the disclosure.
In the letter dated Thursday, ADW Capital identified that it holds approximately 3.7% of Driven Brands and outlined steps it has taken toward completing a transaction. The hedge fund said it has met with financial advisers and potential financing sources and is "highly confident" that it can obtain the financing necessary to carry out the acquisition, though the firm noted this remains subject to customary due diligence.
ADW's buyout proposal is presented as part of a wider push to change the direction of the automotive services provider and to displace Roark Capital, the private-equity firm that is Driven Brands' majority owner. Driven Brands is the parent company of several automotive service chains, including Meineke and Auto Glass Now.
The outreach from ADW follows an earlier campaign element in which the hedge fund urged Driven Brands last month to start a strategic review process and to consider options including a sale or a breakup of the company, the report said.
Summary
ADW Capital has offered $18 per share to buy all outstanding Driven Brands shares in a proposal valued at nearly $3 billion, according to a letter cited by the reporting outlet. The bid represents about a 40% premium to recent stock levels. ADW, which owns roughly 3.7% of the company, said it has spoken with advisers and potential financing sources and is "highly confident" of securing funding, though completion would depend on due diligence. The move is tied to ADW's effort to overhaul Driven Brands and remove majority owner Roark Capital. Driven Brands operates brands such as Meineke and Auto Glass Now. Previously, ADW had asked the company to begin a strategic review and assess a sale or breakup.
Context and market reaction
The public disclosure of the $18-per-share bid immediately affected Driven Brands' share price, reflecting investor attention on potential change-of-control activity and the premium contained in the proposal. ADW's communications emphasize confidence about financing while noting the conditional nature of any final deal.
What remains unresolved
The letter makes clear that financing and due diligence are outstanding items. The report does not provide additional detail on timetables, the responses of Driven Brands' board or majority owner Roark Capital, or the next procedural steps in any negotiation.
All factual points in this article reflect the contents of the reported letter and related disclosures as described above.