US-based multi-brand restaurant company, Inspire Brand has acquired Dunkin’ Brands, owner of the Dunkin’ donut and Baskin-Robbins ice cream chains in an $11.3 billion (Dh41bn) deal, which is one of the biggest transaction ever in the restaurant industry.
The company said in a statement that the Inspire, who owns chains such as Arby’s and Buffalo Wild Wings will take Dunkin’ Brands Group private at $106.50 share. That represents a 20 percent premium over the closing price of October 23, before reports of the deal talks sent shares soaring. The price is 6.8 percent higher than the close on Friday.
Paul Brown, co-founder and chief executive of Inspire Brands said, “The Dunkin’ and Baskin-Robbins’ brands are “two of the most iconic restaurant brands in the world” and will strengthen Inspire with their international operations, licenses and 15 million loyalty members.”
The deal highlights Dunkin’s growth potential and adds big brands to the portfolio of Inspire. While the pandemic has upended consumer habits and strained the finances of many restaurants, an investment in digital operations at Dunkin’ and expansion beyond traditional breakfast fare has helped its shares outpace the market this year as rivals struggle.
This year, the stock rose 32 percent, including a 12 percent raise after news of the deal talks emerged over the weekend.
Dave Hoffmann, chief executive of Dunkin’ said, “This team’s grit and determination has enabled us to deliver outsized performance. During the global pandemic, we have stood tall”.
“Dunkin’ fared well due to investments in its mobile ordering app — enhancing contactless buying options — and expansion in a lunch category where the company had previously had little presence,” he added.
Inspire, funded by the Atlanta-based private equity firm Roark Capital was established in 2018 through the merger of Arby’s and Buffalo Wild Wings. Since acquiring Sonic and Jimmy John’s, the company has said it wants to create a range of restaurant brands that serve customers across various markets.
By the end of the year, they are anticipated to close the Dunkin’ deal. Dunkin ‘was advised by Bank of America on the agreement, while Barclays advised Inspire.
Dunkin, ‘which had $1.4 billion in sales last year provides Inspire with a portfolio of more than 12,500 Dunkin’ and nearly 8,000 Baskin-Robbins restaurants worldwide. During a period of dislocation for the industry, Dunkin ‘has reshaped its footprint announcing plans in July to permanently close around 800 US locations as part of a “real estate portfolio rationalization.”
The Inspire deal comes about nine years after Dunkin’s went public. Pernod Ricard, a France-based Beverage Company, sold the Dunkin’ Brands to a consortium of investors including Bain Capital, the Carlyle Group and Thomas H. Lee Partners for $2.4 billion in 2006.