Dunkin’ Manufacturers, the father or mother firm of the Dunkin’ and Baskin Robbins chains, is in talks to promote itself to a non-public equity-backed firm, Encourage Manufacturers.
The deal being mentioned, which might be introduced as quickly as Monday, would take Dunkin’ Manufacturers personal at a value of $106.50 a share, mentioned two individuals with data of the negotiations, who spoke on situation of anonymity as a result of the talks are confidential. The worth could be a 20 p.c premium over the corporate’s closing value on Friday, and implies an organization valuation of about $8.8 billion. Dunkin’s share value has greater than doubled since March, as buyers took heed of its success in increase its app and drive-through companies. Its shares are up about 18 p.c from a 12 months in the past.
The transaction would add Dunkin’ Manufacturers to Encourage Manufacturers’ portfolio, which incorporates Arby’s, Buffalo Wild Wings, Sonic and Jimmy John’s. Encourage is backed by the personal fairness agency Roark Capital.
In an announcement on Sunday, Dunkin’ Manufacturers mentioned: “Dunkin’ Manufacturers confirms that it has held preliminary discussions to be acquired by Encourage Manufacturers. There is no such thing as a certainty that any settlement can be reached. Neither group will remark additional until and till a transaction is agreed.”
A spokesman for Encourage Manufacturers had no remark.
Dunkin’ has mentioned that as stay-at-home orders have shifted working patterns, clients have been coming to its shops later within the day than they used to and spending extra on newer and costlier objects like espresso and different specialty drinks. Dunkin’ already brings in additional than half its income via drinks, and it dropped “Donut” from its identify final 12 months because it seeks to shift its emphasis to espresso and tackle Starbucks extra instantly.
“Whereas Dunkin’ could not have been considered by buyers as a beneficiary of the present setting, these outcomes make the case that it has been,” analysts at Morgan Stanley wrote in a analysis be aware this summer time.
Throughout the pandemic, Dunkin’ has been bolstered by its drive-throughs and on-line ordering techniques, permitting its eating places to proceed to serve clients whereas smaller, impartial chains have faltered. It took an preliminary hit within the pandemic, reporting a 20 p.c drop in gross sales within the second quarter and announcing plans to shut about 800 of its least-profitable shops. However enterprise since then has been enhancing.
Dunkin’ Manufacturers, whose 21,000 shops are all franchised, reported income final 12 months of $1.4 billion and a revenue of greater than $240 million.
The chain has been personal earlier than. It was owned by a consortium of personal fairness companies, led by Bain Capital, Carlyle Group and Thomas H. Lee Companions, who acquired Dunkin’ Donuts from Pernod Ricard in a $2.4 billion deal in 2005. The companies took it public six years later.