Dunkin' to Be Sold to Inspire Brands for $11.3 Billion -- Update
By Heather Haddon
Inspire Brands Inc. will buy Dunkin' Brands Group Inc. for $11.3
billion including debt, the companies said, setting up one of the
largest restaurant deals in years as some in the industry think
beyond the coronavirus pandemic.
The deal is the second-largest acquisition of a North American
restaurant chain in at least a decade, behind the $13.3 billion
deal for Tim Hortons by Restaurant Brands International Inc. in
2014, according to investment data provider Dealogic. Inspire, the
owner of Arby's and other chains that is backed by private-equity
firm Roark Capital, said the deal will make it the second-largest
U.S. restaurant chain by domestic sales after McDonald's Corp. The
deal is expected to close by the end of the year, the companies
said on Friday.
Talks between the companies started before the pandemic,
according to Inspire. The pandemic complicated negotiations,
Inspire's Chief Executive Paul Brown said, in part because it
caused a steep drop in Dunkin's core breakfast sales. Chains
focused on breakfast sales have been hit hard by the end of daily
commutes and school runs.
Mr. Brown said that he believes consumers will get back to their
old routines after the pandemic is over and that the chain's
drive-throughs were attractive. During the pandemic, chains with
drive-throughs have benefited from being able to maintain that
relatively low-contact avenue for sales.
Dunkin' on Thursday reported a U.S. same-store sales increase of
1% in its quarter ended in September, and said that sales remained
up in its current period.
"There's an opportunity for the right kind of brand doing the
right thing to actually take advantage when those habits are
rebuilt," Mr. Brown said in an interview.
Dunkin' CEO Dave Hoffman said in a statement that the deal will
help the company's franchisees continue to grow their
Inspire said its all-cash deal to take the owner of Dunkin'
coffee shops and Baskin-Robbins ice cream stores private would
value it at $106.50 a share, a 20% premium to its closing price on
Oct. 23, before the New York Times reported last weekend that the
two companies were discussing a possible deal.
More to come...
Write to Heather Haddon at email@example.com
(END) Dow Jones Newswires
October 30, 2020 20:33 ET (00:33 GMT)
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