Dunkin’ Coffee? Cheap. Dunkin’ Deal? Priciest Ever.
The chain’s $11.3 billion buyout by private equity-backed Inspire Brands is the industry’s most expensive takeover. Here’s why.
Dunkin' investors have been thirsty for a deal. They got what they wanted.
Photographer: Dunkin'
Dunkin’ Brands Group Inc. just served up one highly caffeinated deal that will give its stock price a jolt come Monday.
The Canton, Massachusetts-based coffee chain is selling itself to Inspire Brands for $106.50 a share, a 26% premium to its 20-day trading average before talks between the two sides were made public. The deal values Dunkin’ at $11.3 billion including debt, which works out to almost nine times Dunkin’s trailing 12-month revenue and more than 23 times Ebitda. That makes it the most expensive acquisition that the restaurant industry has ever seen. It’s worth noting that Dunkin’s sales and profit are both depressed this year because of Covid-19 shutdowns and social distancing. But even using last year’s unaffected figures, the Dunkin’ deal is still in the same league as the 2017 sale of Popeyes Louisiana Kitchen to Burger King’s parent company, which previously held the title of priciest takeover ever.