Inspire Brands’ Dunkin’ Deal

By Sandhya Anand, Staff Writer

Did you ever think that wings and donuts could make a great combination? While a concoction of barbeque sauce and chocolate glaze sounds horrific, owning both Buffalo Wild Wings and Dunkin donuts could be a sweet, sweet deal.  

Dunkin’ has experienced various ups and downs in its lifetime. It first went public on July 27th, 2011 at an offering price of $19 per share. Its present CEO, David Hoffman was appointed during the same month seven years later. In the latest turn of events, the company has decided to revert back to the status of a private company. 

The Wall Street Journal has reported that Dunkin Donuts will be acquired by Inspire Brands for 11.3 billion including debt.  This deal is one of the many mergers and acquisitions occurring all across the United States despite the rising cases of COVID-19. Barclays acted as the financial advisor for Inspire while Bank of America Securities handled Dunkin’s transactions. 

According to the Financial Times, Inspire earns over 14.6 billion in annual sales through its fast-food empire. The company’s portfolio contains more than 11,000 restaurants with 1400 franchises including popular food chains such as Arby’s, Buffalo Wild Wings, and Jimmy John’s.

They are backed by private equity firm Roark Capital: a consumer-based US private equity firm that has dabbled in other food-centric franchises such as Cinnabon and Cheesecake Factory.  The Dunkin acquisition will also include Baskin Robbins, the famous worldwide ice cream chain. 

“They will strengthen Inspire through their scaled international platform and robust consumer packaged goods licensing infrastructure, as well as add more than 15 million loyalty members,” stated Paul Brown, CEO of Inspire. 

Indeed, this is true as Inspire will have a stronger foothold over the breakfast market and will almost double its annual sales from the current $15 billion to $26 billion. 

This has had quite the ‘sweet’ result on Wall Street. DNKN soared to an all-time high climbing from roughly 6.5% to a value of $106.18 per share, which is slightly less than the amount of $106.50 per share that Inspire agreed to pay the company.

“The M&A agreement is a testament to the work we’ve done together to transform Dunkin’ and Baskin-Robbins into modern, relevant brands for millions of people every day around the world,” stated Dave Hoffman, CEO of Dunkin Brands. 

While the pandemic severely affected the chain in the second quarter, dropping almost 20.8% as compared to last year, the third quarter has seen significant improvement with just a 1.3% year over year decline in sales. This was propped by the fact that consumers spent more on bigger orders and specialty drinks. 

Baskin Robbins has 12,900 outlets spotted throughout the world alongside Baskin Robbins which holds 8000 places. Wall Street Journal has claimed that will make Inspire the second-largest U.S. restaurant chain by domestic sales after McDonald’s Corp.  

The two companies have announced that they expect the deal to be completed by the end of 2020.

Photo by Nathan Dumlao, Unsplash

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