Edgar Filing: SONIC CORP

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A
(Rule 14A-101)

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

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SONIC CORP.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Dear Sonic Franchisees,

I am reaching out to share that Sonic Corp. has entered into an agreement to be acquired by Inspire Brands, Inc. Following the completion of the transaction, Sonic will operate as a separate business unit within Inspire and will continue to be based in Oklahoma City and led by our management team. While the Company’s ownership structure will change, our franchise structure, branding, operations, and commitment to exceeding the expectations of our guests will remain the same.

Our agreement with Inspire validates the actions we have taken over the last year to increase traffic and improve sales while delivering differentiated offerings and superior guest service. Thanks in large part to the strength of our franchisees and franchisee relationships, Sonic now has an all-time brand record of 3,606 drive-ins in operation in 45 states. In a challenging market with heightened competition and changing consumer needs, we have successfully implemented a number of key strategic initiatives, including mobile order ahead, operational simplification, and a more streamlined go-to-market strategy, to deliver the most personalized guest experience in the QSR industry, support our franchisees and drive growth.

Importantly, the Inspire team has great respect for the Sonic brand, our company and confidence in our future. Inspire recognizes our loyal customer base, strong differentiation in the marketplace, unique culture of collaboration with our franchisees and the important role that our franchisees play in driving our Company’s success. We will continue to work closely with you and support your business with technology, new products and marketing and operational programs.

Joining a Leading Restaurant Group

Inspire is a multi-brand restaurant company whose portfolio includes more than 4,700 Arby’s, Buffalo Wild Wings, and Rusty Taco locations worldwide. It is majority-owned by Roark Capital Group, an Atlanta-based private equity firm that specializes in consumer, multi-unit and franchise brands, including Focus Brands (Moe’s, McAllister’s, Jamba Juice), Seattle’s Best Coffee, Auntie Anne’s, Carl’s Jr / Hardee’s, Corner Bakery, and Culver’s among others.

We have much to gain by joining forces with Inspire’s powerful group of distinct restaurants. We have long recognized the advantages certain competitors have as private companies. As a privately-held company, we expect to have increased operational flexibility, and being part of a larger organization enables outsized investments in long-term growth initiatives and provides the ability to leverage scale to drive efficiencies. Working closely with Inspire, we will continue to provide made-to-order American classics, distinctive flavors and the most personalized guest experience in our industry.

Next Steps

There is much to do before the transaction is completed, which is expected to occur by the end of the year. Until then, day-to-day operations and implementation of strategic initiatives will continue as usual at Sonic. During this time, we know you will continue to serving your guests, growing your business and representing the Sonic brand like you always do.

A big part of the efforts between now and closing will be planning for Sonic’s future as a private company, owned by Inspire. We will continue to keep you informed as we move forward with this planning process.

The FAC meeting currently scheduled for November will proceed as usual.

You may have questions about today’s announcement. Attached is an FAQ to assist in answering your immediate questions, and we will hold a conference call on Tuesday, September 25, 2018 at 9:00 a.m. CENTRAL to speak further regarding this news. You can access the call here:

Dial in: 1-866-380-4644

Conference ID: 53169#

As we begin this next chapter in our company’s history, I thank you for your commitment to our brand and your exceptional efforts in making Sonic a great American success story.

Sincerely,

Cliff Hudson

Chairman and CEO

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This communication contains “forward-looking statements” within the meaning of the U.S. federal securities laws. Such statements include statements concerning anticipated future events and expectations that are not historical facts. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Actual results may vary materially from those expressed or implied by forward-looking statements based on a number of factors, including, without limitation: (1) risks related to the consummation of the merger, including the risks that (a) the merger may not be consummated within the anticipated time period, or at all, (b) the parties may fail to obtain shareholder approval of the merger agreement, (c) the parties may fail to secure the termination or expiration of any waiting period applicable under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (d) other conditions to the consummation of the merger under the merger agreement may not be satisfied, and (e) the significant limitations on remedies contained in the merger agreement may limit or entirely prevent Sonic Corp. from specifically enforcing Inspire Brands, Inc.’s obligations under the merger agreement or recovering damages for any breach by Inspire Brands, Inc.; (2) the effects that any termination of the merger agreement may have on Sonic Corp. or its business, including the risks that (a) Sonic Corp.’s stock price may decline significantly if the merger is not completed, (b) the merger agreement may be terminated in circumstances requiring Sonic Corp. to pay Inspire Brands, Inc. a termination fee, or (c) the circumstances of the termination, including the possible imposition of a 12-month tail period during which the termination fee could be payable upon certain subsequent transactions, may have a chilling effect on alternatives to the merger; (3) the effects that the announcement or pendency of the merger may have on Sonic Corp. and its business, including the risks that as a result (a) Sonic Corp.’s business, operating results or stock price may suffer, (b) Sonic Corp.’s current plans and operations may be disrupted, (c) Sonic Corp’s ability to retain or recruit key employees may be adversely affected, (d) Sonic Corp.’s business relationships (including, customers, franchisees and suppliers) may be adversely affected, or (e) Sonic Corp’s management’s or employees’ attention may be diverted from other important matters; (4) the effect of limitations that the merger agreement places on Sonic Corp’s ability to operate its business, return capital to shareholders or engage in alternative transactions; (5) the nature, cost and outcome of pending and future litigation and other legal proceedings, including any such proceedings related to the merger and instituted against Sonic Corp. and others; (6) the risk that the merger and related transactions may involve unexpected costs, liabilities or delays; (7) other economic, business, competitive, legal, regulatory, and/or tax factors; and (8) other factors described under the heading “Risk Factors” in Part I, Item 1A of Sonic Corp.’s Annual Report on Form 10-K for the fiscal year ended August 31, 2017, as updated or supplemented by subsequent reports that Sonic Corp. has filed or files with the SEC. Potential investors, shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Neither Inspire Brands, Inc. nor Sonic Corp. assumes any obligation to publicly update any forward-looking statement after it is made, whether as a result of new information, future events or otherwise, except as required by law.

ADDITIONAL INFORMATION AND WHERE TO FIND IT

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This communication may be deemed to be solicitation material in respect of the proposed merger between Inspire Brands, Inc. and Sonic Corp. In connection with the proposed transaction, Sonic Corp. plans to file a proxy statement with the Securities and Exchange Commission (“SEC”). SHAREHOLDERS OF SONIC CORP. ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO AND ANY DOCUMENTS INCORPORATED BY REFERENCE THEREIN) AND OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE PROPOSED TRANSACTION THAT SONIC CORP. WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. Shareholders and investors will be able to obtain free copies of the proxy statement and other relevant materials (when they become available) and other documents filed by Sonic Corp. at the SEC’s web site at www.sec.gov. Copies of the proxy statement (when they become available) and the filings that will be incorporated by reference therein may also be obtained, without charge, at https://ir.sonicdrivein.com/ or by contacting Sonic Corp.’s Investor Relations at (405) 225-5000.

PARTICIPANTS IN SOLICITATION

Sonic Corp. and its directors, executive officers and certain employees may be deemed, under SEC rules, to be participants in the solicitation of proxies in respect of the proposed merger. Information regarding Sonic Corp.’s directors and executive officers is available in its proxy statement filed with the SEC on December 18, 2017. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC (when they become available). These documents can be obtained free of charge from the sources indicated above.