Driven Brands receives buyout offer from activist shareholder

ADW Capital Management has proposed to acquire outstanding shares of Driven Brands’ common stock for $18 per share in cash in an open letter it published. 

The proposal represented a 41% premium over the closing price of $12.74 per share at the time the letter was written. It added that this was 42% premium over the 30-day volume-weighted average price of $12.69. 

Driven Brands shares increased moderately following the offer, reaching $14.56 on May 1, but have since lowered, closing Thursday at $13.75. 

ADW’s proposal comes at the deadline that looms for investors to file lead plaintiff applications in a class action suit against Driven Brands. Those who purchased, or otherwise acquired company shares between May 3, 2023, and Feb. 24, 2026, and have losses in excess of $100,000 have until today to file the application. 

In February, Driven Brands reported material errors in the company’s previously issued consolidated financial statements for fiscal years 2023 and 2024.

As a result, the company delayed the filing of its Annual Report on Form 10-K and the first three quarters of 2025. 

The price of Driven Brands’ shares fell nearly 40% from a close of $16.61 on Feb. 24 to $9.99 on Feb. 25 at opening.

ADW’s open letter states that it previously sent a letter March 26 to Driven Brands, and has since increased its position, now owning approximately 3.7% of the company’s common stock. 

“We are disappointed that neither the company nor Roark Capital Group (with its affiliates, “Roark”), the company’s controlling shareholder, has even acknowledged the receipt of our prior letter and call for the company to undertake a strategic review process,” the letter states. “As we remain convinced of the value of Driven Brands and believe that stockholders deserve a chance to realize value for their investment.” 

The letter says ADW believes that Driven Brands is materially undervalued due to self-inflicted structural, capital allocation, and governance failures. It accuses Roark of focusing on positioning its larger restaurant platforms to go public at the expense of attending to Driven Brands. 

“Is this how Roark treats its private investors who ‘lock-up’ their capital for 10,15, or 20 years?” the letter states. “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 Inspire 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 Company, is this how public minority investors should expect to be treated by Roark-controlled entities in the future?”

ADW provides a “Sum of the Parts” analysis in the letter, asking its shareholders to review and tell the Driven Brands board that the company should be sold. 

It adds that its proposal is based on publicly available information, and it reserves the right to withdraw or modify it at any time for any reason. 

The letter gives a May 15 deadline for a meeting between AWD and Driven Brands. 

“If the Company refuses to engage with us in good faith, we reserve all rights, including taking our proposal directly to shareholders and pursuing any available legal remedies to ensure the Company’s shareholders can realize the true value of their investment,” the letter states. 

This is not the first time that Driven Brands has seen its stock plummet. 

It dropped about 37.55% in 2023 to an all-time low at the time of $16.05 following two investigations into violations of federal securities laws that were launched by Wolf Popper and Holzer & Holzer.

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Photo of DrivenBrands logo.