Roark Capital Group has won the race to acquire U.S. sandwich chain Subway after seeing off a late challenge from a rival bid group led by TDR Capital and Sycamore Partners.

The private equity firm has entered into a definitive agreement to buy Subway, according to a statement on Thursday. Financial details were not disclosed. Bloomberg News reported earlier today that Roark was putting the final touches on its takeover of the company. 

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The deal is valued at roughly $9.55 billion, people with knowledge of the matter said, asking not to be identified discussing confidential information. Roark will pay about $9 billion upfront, with the remainder coming in future so-called earnout payments, they said.

Morgan Stanley, Barclays Plc, JPMorgan Chase & Co., Mizuho Financial Group Inc., MUFG, Rabobank and Wells Fargo & Co. are providing financing of around $5 billion to back the deal, the people said.

Roark beat competition from TDR and Sycamore, which brought on Goldman Sachs Group Inc.’s asset management arm and sovereign wealth fund Abu Dhabi Investment Authority in a last-ditch effort to come out on top, Bloomberg News reported on Tuesday.

The Wall Street Journal reported on Monday that Roark was in advanced talks to acquire Subway for around $9.6 billion and looking to finalize a deal this week. Axios later reported that the founding family hadn’t yet picked a buyer.

One of the most recognizable names in fast food, Subway is the largest restaurant chain in the U.S. by store count, dwarfing names like McDonald’s and Burger King. Globally, it has about 37,000 franchise-run locations in more than 100 countries. The company, which said in February it was exploring a sale and working with JPMorgan Chase & Co., initially drew about 20 bids.

Roark, which manages $37 billion in assets, has backed restaurant chains including the parent companies of Arby’s, Dunkin’ Donuts, Carvel and Carl’s Jr. A purchase of Subway could draw scrutiny from antitrust regulators in the U.S. amid a general trend in Washington to take a closer look at deals.

“This transaction reflects Subway’s long-term growth potential, and the substantial value of our brand and our franchisees around the world,” John Chidsey, CEO of Subway, said in Thursday’s statement. 

Fred DeLuca, who co-founded the Subway sandwich chain to finance his college studies, opened its first shop in Bridgeport, Connecticut, in 1965. With his death in 2015 and that of his co-founder, Peter Buck, in 2021, control of the company that owns Subway passed to their heirs. In March, Subway opened a dual headquarters in Miami.

Subway’s profitability has been squeezed as it spends money to overhaul stores to keep up with those rivals, which have been investing heavily to beautify locations and build up their online capabilities. It’s also been grappling with stiffening competition from upstart sandwich chains such as Jersey Mike’s Subs.

—Bloomberg News