Dunkin’ Brands Files IPO for as Much as $400 Million
Dunkin’ Brands Group Inc., operator of the Dunkin’ Donuts coffee chain, filed to raise as much as $400 million in an initial public offering to pay down debt.
JPMorgan Chase & Co., Barclays Capital and Morgan Stanley will serve as underwriters, according to a regulatory filing. Dunkin’ didn’t disclose the pricing per share or an offering date. The stock will be listed on the Nasdaq Stock Market. The new ticker will be DNKN.
Dunkin’ was taken private five years ago by private equity firms Bain Capital LLC, Carlyle Group and Thomas H. Lee Partners LP in a deal valued at $2.43 billion. The chain has picked a good time for an IPO as consumers are feeling more confident and spending more money eating out, said Jack Russo, an analyst at Edward Jones & Co. in St. Louis.
“The food-service environment in general has improved over the last six to nine months,” Russo said. Dunkin’ “has had success historically -- the name brand is there, the food quality is there.”
Dunkin’, which is based in Canton, Massachusetts, is also seeking to enter the growing single-cup coffee business by partnering with Green Mountain Coffee Roasters Inc. (GMCR) to make K- Cups for Green Mountain’s Keurig brewing machine. The single- serving packets will start selling this year, the companies said in a statement on Feb. 22.
Bain, Carlyle and Thomas H. Lee each own more than 5 percent of the company’s stock, according to the filing.
Dunkin’ has more than 16,000 locations in 57 countries under the Dunkin’ Donuts and Baskin-Robbins brands. The donuts brand was created in the 1940s when Bill Rosenberg founded his first restaurant, which was later renamed Dunkin’ Donuts.
Sales at Dunkin’ Brands increased 7.2 percent to $577.1 million in the year ended Dec. 25, according to the filing. Net income fell 23 percent to $26.9 million in the same period.
Dunkin’ is “very East Coast centric,” said Peter Saleh, a restaurant analyst at Telsey Advisory Group LLC in New York. “I suspect they want to expand their base from the Northeast to a little further south and spread out across the country.”
There have been 69 U.S. IPOs this year, according to data compiled by Bloomberg. The largest was HCA Holdings Inc., a Nashville, Tennessee-based hospital chain, which raised $3.79 billion in March excluding an overallotment option.
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