(Reuters) - Fried chicken and biscuit fast food chain Bojangles Inc (BOJA.O) is exploring strategic alternatives, including a potential sale, people familiar with the matter said on Friday, making it the latest U.S. restaurant operator to do so.
Dealmaking in the sector is heating up as increasing competition and costs fuel consolidation. Just this week, Inspire Brands Inc, owner of the Arby’s, Buffalo Wild Wings and Rusty Taco chains, said it would buy Sonic Corp (SONC.O) for $1.57 billion in cash, while sources told Reuters Papa John’s International Inc (PZZA.O), the world’s third-largest pizza delivery company, has put itself up for sale.
Bojangles is working with Bank of America (BAC.N) as it explores its options, the sources said, cautioning that there is no certainty of a company sale. Private equity firm Advent International Corp took Bojangles public in 2015 and still owns just over half the company.
The sources asked not to be identified because the matter is confidential. Bojangles did not immediately respond to a request for comment, while Bank of America and Advent declined to comment.
Bojangles shares rose 10 percent on the news to $15.35 in Friday afternoon trading in New York, giving the company a market capitalization of $580 million.
Based in Charlotte, North Carolina, Bojangles has a portfolio of 766 restaurants, 325 of which it operates and 441 of which it franchises, located for the most part in the Southeastern United States.
In March, Bojangles Chief Executive Clifton Rutledge stepped down for personal reasons, amid a string of quarters with shrinking comparable restaurant sales.
Since then, the company has focused on a number of initiatives to reorganize, including closing underperforming restaurants and narrowing its menu.
Reporting by Harry Brumpton and Greg Roumeliotis in New York; Additional reporting by Joshua Franklin in New York; Editing by Steve Orlofsky