Dunkin’ Brands In Talks To Sell Itself And Go Private In A Possible $8.8 Bn Deal

Dunkin' Brands, the parent company of Dunkin’ and Baskin Robbins, is in preliminary talks to sell itself to a private equity-backed company, Inspire Brands, in a deal that could exceed $8.8 billion.

Inspire Brands, owner of restaurant chains including Arby’s, Buffalo Wild Wings, Sonic Drive-In and Jimmy John's, will take Dunkin’ private at $106.50 a share, a 20% premium over the company’s stock close Friday, two anonymous sources told The New York Times. The deal could be announced as soon as Monday, the report said.

At the outset of the coronavirus pandemic, Dunkin' Brands reported losses and a 20% drop in sales in its second quarter. But its newly-launched mobile applications and enhanced drive-through services have assisted the company in surviving the pandemic. Its stock price has more than doubled since March, and its present-day share price is about 18% higher than the same time last year.

In a statement, Dunkin’ Brands said, “There is no certainty that any agreement will be reached. The company will not comment further until a transaction is agreed or discussions are terminated.” Inspire Brands declined to comment.

Dunkin’ Brands was taken private one other time, in 2005, when France-based Pernod Ricard sold the company to a consortium of private firms Bain Capital Partners , The Carlyle Group and Thomas H. Lee Partners. The company went public again in July 2011.

Inspire Brands, backed by private equity group Roark Capital, has been on an acquisition spree for the past three years. “The thesis we have around the value of having a broad brand portfolio and achieving scale through acquisition really has played out very much,” Inspire Brands CEO Paul Brown said in an interview with Yahoo in August.

In a $2.9 billion deal, Brown acquired Buffalo Wild Wings in 2017 and Sonic in December 2018 for $2.3 billion. Inspire Brands acquired Jimmy John’s for an undisclosed amount in 2019. Dunkin’ would be the company’s biggest deal yet.

Dunkin’ Brands has 21,000 distribution points in over 60 countries. The company reported a revenue of $1.4 billion and a profit of more than $240 million last year. It removed the famous ‘Donuts’ from its name in 2018 to expand its portfolio to include beverages as way to compete directly with Starbucks. It also closed 800 of its least-profitable stores permanently earlier this year.