Driven Brands denies ‘highly conditional,’ ‘unsolicited’ acquisition proposal
Driven Brands Holdings Inc. has announced that its Board of Directors unanimously rejected a non-binding and unsolicited proposal from ADW Capital Management to acquire Driven Brands for $18 per share in cash, according to an Aug. 3 press release.
“Consistent with its fiduciary duties and in consultation with its financial and legal advisors, the Board carefully reviewed and evaluated ADW Capital’s proposal,” Driven Brands states in the release. “Following its review, the Driven Brands Board unanimously determined that ADW Capital’s proposal is highly conditional and does not provide a credible basis on which the company could proceed. Additionally, the Board concluded that ADW Capital’s proposal significantly undervalues the company in light of its long-term value-creation opportunities and is therefore not in the best interest of Driven Brands and its shareholders.”
ADW Capital Management proposed to acquire outstanding shares of Driven Brands’ common stock for $18 per share in cash in an open letter it published earlier this year.
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 a 42% premium over the 30-day volume-weighted average price of $12.69.
The letter stated that ADW believes Driven Brands is materially undervalued due to self-inflicted structural, capital allocation, and governance failures. It accuses Roark Capital Group, Driven Brands’ controlling shareholder, of focusing on positioning its larger restaurant platforms to go public at the expense of attending to Driven Brands.
The Aug. 3 Driven Brands press release adds that the board and Driven Brands leadership “remain confident in the company’s strategy, long-term value-creation opportunities, and disciplined execution.”
“The board remains committed to acting in the best interests of all shareholders and to evaluating opportunities to maximize shareholder value,” it states.
During its Q1 earnings call held in June, Driven Brands President and CEO Danny Rivera told investors that the company is “all about cash” when it comes to its Franchise Brands Division, and uses alternative parts to reduce vehicle repair costs.
Investors were reminded during the call of Driven Brands’ non-compliance with Nasdaq Listing Rule 5250(c)(1) due to the delayed filing of its quarterly report on Form 10-Q for the period ended March 28, 2026, and that a remedy was in the works. It also reported on the call that quarterly revenue was up 8% to $484.4 million compared to Q1 2025.
The company ended the quarter with a net leverage ratio of 3.2 times Adjusted EBITDA and total liquidity of $804 million consisting of $133 million in cash and cash equivalents and $671 million of undrawn capacity on its variable funding securitization senior notes and revolving credit facility, not including an additional $135 million 2022-1 Securitization Senior Notes. Driven Brands says the notes will expand its variable funding note borrowing capacity if it elects to exercise them.
Its Q2 earnings call is scheduled for Aug. 6 at 8:30 a.m. EST.
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