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Breakfast giant Dunkin' Brands readies $400 million IPO
Analyst IPO Market Commentary
Through their ownership of retail food brands Dunkin' Donuts and Baskin Robbins Ice Cream, Dunkin' Brands is the world's leading franchisor of quick service restaurants ("QSRs") serving hot and cold coffee and baked goods, as well as hard serve ice cream. Wednesday, the Canton, MA-based company filed with the SEC to
raise up to $400 million in an initial public offering
According to the SEC filing, Dunkin' Brands holds a portfolio of over 16,000 points of distribution in 57 countries with strong brand awareness for its breakfast, coffee, and ice cream products. In the United States, Dunkin' Brands holds a 52% market share of breakfast daypart visits and 57% share of total QSR coffee, based on servings nearly six times greater than that of the nearest competitor. Dunkin' Donuts 12 oz. original blend bagged coffee was the #1 grocery stock-keeping unit nationally in the premium coffee category.
Dunkin' Brands generates 100% of its revenue through its global franchisee network, which includes 6,672 standalone stores and 15,000 points of distribution in the United States. It booked $287 million in Adjusted EBITDA on $589 million in sales in the trailing 12 months, a 9.5% increase from the $538 million in sales booked fiscal year 2009. The company plans on using the proceeds from the offering to pay down outstanding notes and bolster working capital.
Dunkin' Brands was purchased by Pernot Richard S.A. in 2005 and subsequently acquired by Bain Capital, Carlyle, and Thomas H. Lee for $2.4 billion in 2006. With this offering, Dunkin' Brands is the latest major private equity backed company to file for an IPO as private equity owners look to capitalize on an increasingly active IPO market. Others notable PE backed companies coming to market include Toys R Us (
), Party City (
), and Freescale Semiconductor (
). Of the
56 total IPOs this calendar year
, 13 have been Private Equity backed. These deals raised over $12 billion or 64% of total US IPO proceeds, and earned investors an average return of 12.6%.
Dunkin' Brands plans to list on the NASDAQ under the symbol (
). J.P. Morgan, Barclay's Capital, and Morgan Stanley are the lead underwriters on the deal. Timing and pricing terms were not disclosed
Keywords / Tickers: DNKN
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