Inspire Brands acquired Dunkin’ in an $11.3 billion deal. A holding company, Inspire Brands (the Roark Capital Group, the parent company), is going to purchase Dunkin’. The company also owns Baskin-Robbins. Moreover, ‘Inspire’ previously owns 11,000 Arby’s, Sonic, Jimmy John’s, Buffalo Wild Wings, and other restaurants.
Along with the Dunkin’ debt in the deal, ‘Inspire’ plans to buy outstanding shares of Dunkin’ at $106.50 apiece. At the market closure on Friday, the stock priced at around $99.71 per share. Paul Brown, the CEO of Inspire Brands, stated while announcing the deal that Dunkin’ and Baskin-Robbins would complementary to Inspire’s “complementary” to the portfolio of Inspire.
Dunkin’ is being acquired in a $11.3 billion deal.
Inspire Brands, a holding company backed by the Roark Capital Group, a private equity firm, is purchasing Dunkin’, which also owns Baskin-Robbins. https://t.co/ZaUdd6QExC
— CNN Business (@CNNBusiness) October 31, 2020
Furthermore, he mentions that through the two brands, ‘Inspire’ will have access to international customers and over fifteen million loyalty program members, among other things. The acquisition will nearly triple the restaurant footprint of ‘Inspire’: Dunkin’ has over 12,500 locations, while Baskin-Robbins has almost eight thousand.
Dave Hoffman, the CEO of Dunkin’, stated that the deal would bring meaningful worth to shareholders. He also shows his expectations that the deal will drive growth for franchise operators. BTIG restaurant analyst Peter Saleh said in a note that the purchase makes sense as it gives Inspire an established state brand with Dunkin’.
Pandemic hit the breakfast items in the fast-food space sector
Dunkin’ was emphasizing its coffee in recent years. It dropped “Donuts” in 2018 from its name, and since then, it invested money in espresso machines as well as new brewing equipment. Also, it tested out new items of breakfast, including a plant-based sausage sandwich. Before the coronavirus pandemic, breakfast was one of the growing sectors in the fast-food category.
However, now the sales of breakfast items are falling because of the disruption to morning commutes. From April to June, the sales at United States Dunkin’ locations open at least one year slumped almost nineteen percent. However, sales have been improving. In the above three months, sales at the same-store at U.S. Dunkin’ stores raised nearly 0.9%.