Dunkin' Brands Nearing IPO

By opening more stores in metropolitan markets and promoting beverages like coffee ahead of its signature donuts, Dunkin' Brands has successfully grown to the point that its ready for an initial public stock offering expected to raise $400 million in capital.

Dunkin' Brands is the operator of Dunkin' Donuts, which has almost 16,000 stores in 31 countries worldwide, including more than 8,000 units in the U.S. The company plans to trade on the NASDAQ when its share becoming publicly traded with the IPO under a DNKN ticker symbol.

Dunkin' shares are expected to be priced between $16 and $18 a share and 22.3 million shares will become public with the IPO. The company expects proceeds of $348 million after deducting expenses. Dunkin's capital anticipated from the IPO is 15 percent more than the company planned in May when it filed initial papers to take its stock public, but Wall Street has shown a hearty appetite for consumer-based IPO's in recent months, increasing the opportunity for Dunkin'.

Dunkin' Brands is also the parent company of Baskin-Robbins, and often Dunkin' Donuts stores are paired with Baskin-Robbins ice cream stores.

Dunkin' Brands was taken private in 2006 by Bain Capital LLC, Carlyle Group and Thomas H. Lee Partners LP, after the firms paid $2.43 billion for the company. Dunkin' then went into attack mode against competitor Starbucks, increasing the number of stores and positioning coffee and other products to diversify sales beyond donuts.

Coffee is now the leading seller at Dunkin', not donuts. Also, the chain has focused on other food and beverage products and promotions to bring in customers. This summer, for instance, Dunkin' is offering any size iced tea with lemon, if desired, for just 99 cents, and its been successful traffic booster in the summer months.

Sales at Dunkin' Brands increased 9.3 percent in the first three months of 2011, to $139.2 million in gross revenue, according to the company's regulatory filings related to the IPO. Dunkin' brands showed a net loss on operations in the quarter, however, of $1.72 million compared to a profit of $5.94 million in the same period the year before.

Dunkin' Donuts products include more than 1,000 donut varieties offering at various times, and other baked products including fritters, crullers, biscuits, munchkins (donut holes), bagels, muffins and cookies. Dunkin' also sells breakfast and lunch sandwiches, Coolattas, iced teas, iced coffees, and espressos and lattes.

The company is also selling its signature coffee beans in grocery stores nationwide.

Dunkin's IPO is being handled by JPMorgan Chase & Co., Barclays Plc, Morgan Stanley, Bank of America Corp.. and Goldman Sachs. The exact timing of when Dunkin's shares will begin trading on the NASDAQ will depend on market conditions and demand for shares, but it's anticipated within 60 days.