It’s raining donuts at Inspire Brands: Dunkin’ joins the family

The American chain, also known as Dunkin’ Donuts before it changed its name in 2018, is among the largest international sellers of coffee and donuts (hence the original name). It is considered the “first coffee and bakery chain in the world”, with over 10,500 stores around the world. It also appeared in several major films such as Iron Man 2 and Men in Black 3. 

The multinational founded in 1950 by William Rosenberg in Massachussetts had invested in its digital business way before the coronavirus changed our habits, favoring contactless takeout. Dave Hoffman, Dunkin’ CEO, did the right thing, since the decision proved successful in the midst of the pandemic. With the increase of new ways of working put in place during the coronavirus crisis, there has been an increase in sales (especially related to espresso and special beverages) since many customers preferred the famous franchise over smaller businesses, probably thanks to the contact-free takeout made available by the company. 

This allowed Dunkin’ to gain market share, raising shares by 32%, in contrast to what is happening in the restaurant world during this time of deep crisis in the sector. The multinational, valued 8.76 billion dollars, has thus become a very attractive prey that has caught the attention of Inspire Brands, the private equity-backed holding company owned by Roark Capital. Inspire already owns several restaurant chains such as Arby’s, Buffalo Wild Wings, Sonic Drive-In, Jimmy John’s and Rusty Taco. And now it is preparing to also add to the list Dunkin’ Donuts and Baskin-Robbins, the ice cream company belonging to Dunkin’ Brands group as well.

Paul Brown, Inspire Brands CEO and co-founder, commented on the sealed agreement with these words: “Dunkin’ and Baskin-Robbins are category leaders with more than 70 years of rich heritage, and together they are two of the most iconic restaurant brands in the world” adding that they will be a great added value for Inspire thanks to their millions loyal customers around the world. 

Inspire must pay $106.50 in cash per share, with a 20% premium over its closing price on 23 October for the acquisition. Dunkin will therefore be sold for a final price of $11.3 billion, which also includes the assumption of debt.

Dave Hoffman said he was “proud of our actions since March of this year. During the global pandemic, we have stood tall. We’ve had each other’s backs and are now stronger than ever”. Then he added: “We are excited to bring meaningful value to shareholders who have been with us on this journey and believe that Inspire Brands […] will continue to drive growth for our franchisees while remaining true to all that is unique and special about the Dunkin’ and Baskin-Robbins brands.”

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