Sky News: Goldman Sachs, Bain Capital Potential Subway Buyers

According to a new report by the U.K.-based Sky News, a number of potential bidders are interested in acquiring the Subway sandwich chain, including Bain Capital, Goldman Sachs Asset Management, TDR Capital, and TPG, with TSG Consumer Partners reportedly “monitoring the situation.”

The news of potential buyers comes almost two months after the Wall Street Journal announced that Subway was exploring a potential sale with an estimated valuation of more than $10 billion dollars, with the company confirming the news more than a month after the report was released. In early March, the Milford, Connecticut-based company announced the opening of a new dual headquarters building in Miami, Florida, which includes Subway’s first innovation center and mock restaurant as well as offices for consumer-facing and Latin American development staff.

In a statement released in February confirming its sale, Subway said, “The management team remains committed to the future and will continue to execute against its multi-year transformation journey, which includes a focus on menu innovation, modernization of restaurants and improvements to its overall guest experience. The company recently announced another record-setting year, ending 2022 exceeding global sales projections and achieving eight consecutive quarters of positive same-store sales growth.”

The mixed group of suitors have varying levels of experience investing in food service brands, with Bain Capital having previously invested in Domino’s Pizza, Burger King, and Dunkin’ Brands; TDR Capital’s portfolio including Pizza Express and Stonegate Pub Company; and TPG’s portfolio including takes in Burger King, Mendocino Farms, and more. Others, such as TSG Consumer Partners, hold assets in categories from automotive and consumer tech to beauty and personal care, with Sky News reporting that Goldman Sachs’ asset management doesn’t typically participate in these types of transactions, though the company supervises more than $2 trillion in assets worldwide.

With about 37,000 locations in more than 100 countries, Subway could benefit from a purchase driving a re-evaluation of its business. The brand has lagged behind competitors in recent years, with its market share of the Top 500 sandwich chains falling to 28% according to Technomic, while competitors such as Jimmy John’s, Firehouse Subs, and Jersey Mike’s have seen their sales grow significantly in recent times. With new investment and new direction, the chain could bring a fresh perspective to its offerings, pleasing investors and consumers alike.