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Dunkin’ acquisition by Inspire Brands: A synergistic move?

Inspire Brands to go ahead with the acquisition of Dunkin’ Brands, owner of Dunkin’ Donuts and Baskin-Robbins ice-cream for $11.3 billion including debt.
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Inspire Brands announced Friday it will go ahead with the Dunkin' acquisition, owner of the Dunkin' Donut and Baskin-Robbins ice cream chains in a transaction valued at approximately $11.3 billion including debt, the company said in a statement.

Inspire is a multi-brand restaurant company and owns 11,000 Arby’s, Buffalo Wild Wings, SONIC Drive-In, and Jimmy John’s restaurants worldwide. It is one of the largest restaurant companies globally with $15 billion in annual systemwide sales.

The Dunkin' chain was founded in 1950 in the US northeastern state of Massachusetts, and is known for its variety of donuts as well as its coffee and breakfast sandwiches.

Baskin-Robbins was started in 1945 in California, and is famed for its 31 flavors of ice cream.

Currently, there are more than 12,500 Dunkin' and almost 8,000 Baskin-Robbins restaurants around the world. Dunkin’ and Baskin-Robbins will continue as distinct brands within Inspire.

The Dunkin’ outlets have suffered a downturn in sales due to the Pandemic, some have even been temporarily or permanently closed with turnover of their parent company having fallen by six percent in total over the first nine months of the year.

Dunkin’ acquisition to be one of the largest restaurant deal in years

Under the terms of the merger agreement, Inspire will commence a tender offer to acquire all outstanding shares of Dunkin’ Brands for $106.50 per share in cash. This takeover represents a premium of approximately 30% to Dunkin’ Brands’ 30-day volume-weighted average price and a premium of approximately 20% per share to Dunkin’ Brands’ closing stock price on October 23, 2020.

Dunkin’ acquisition Inspire Brands

Inspire Brands to acquire Dunkin' Brands for $11.3 billion (Image: Dunkin’ Brands)

“Dunkin’ and Baskin-Robbins are category leaders with more than 70 years of rich heritage, and together they are two of the most iconic restaurant brands in the world,” said Paul Brown, Co-founder and Chief Executive Officer of Inspire Brands. “By joining Inspire, these brands will add complementary guest experiences and occasions to our current portfolio. Further, they will strengthen Inspire through their scaled international platform and robust consumer packaged goods licensing infrastructure, as well as add more than 15 million loyalty members. We are excited to welcome Dunkin’ and Baskin-Robbins’ employees, franchisees, and suppliers to the Inspire family.”

Inspire was founded in 2018 and is headquartered in Atlanta, Georgia. Inspire is majority-owned by affiliates of Roark Capital.

Dunkin' Brands was bought by the French wine and spirits group Pernod Ricard in 2005 from Allied Domecq group. It was sold a year later for $2.4 billion to three investment funds: Bain Capital, Carlyle and Thomas H. Lee. By adding Dunkin', Inspire Brands will have a total of more than 31,600 restaurants, with combined sales of $26 billion and 600,000 employees.

The Dunkin' Brands acquisition deal is subject to certain conditions, and if through, it is expected to be finalized by the end of the year.

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