Inspire Brands Inc. Acquires Dunkin’ and Baskin-Robbins
By: Ashwathy Nair
In a deal of $11.3 billion, the owner of Dunkin’ and Baskin-Robbins agreed to be acquired by a private equity-backed Inspire Brands Inc., which is one of the biggest deals that has ever happened in a restaurant industry overturned by the pandemic.
On Friday, the firms said in a statement that Inspire, which owns franchises like Arby’s and Buffalo Wild Wings, will be taking Dunkin’ Brands Group Inc. private at a share of $106.50. It represents a 20 per cent premium over the closing price of 23rd October before news of the deal talks sent shares soaring. The price is 6.8 per cent higher than the close on Friday.
The co-founder and CEO of Inspire Brands, Paul Brown said in a tweet that the Dunkin’ and Baskin-Robbins brands are “two of the most recognisable restaurant brands in the world” and it will boost Inspire’s strength with its foreign operations, licences and 15 million loyalty members.
The deal highlights Dunkin’s potential for growth and adds major brands to Inspire’s portfolio. While the pandemic has changed many restaurants’ customer likings and strained finances, an investment in Dunkin’ digital operations and growth beyond conventional breakfast fare has enabled its shares to outpace the market as rival’s battle this year.
This year, there is a 32 per cent rise in the stock, which includes a 12 per cent of increase that occurred after the news related to the deal emerged over the weekend.
Dunkin’s chief executive officer, Dave Hoffmann said in the statement while announcing about the deal that, “The grit and dedication of this team have helped us to produce outsized results.” “We have stood tall during the global pandemic”.
Dunkin’ managed well because of its facilities of mobile ordering app investments that helped in improving contactless payment options-and expanding into a lunch market where the brand had previously had little presence. In July, managers of Dunkin’ said during an earnings call that the Canton, Massachusetts-based chain, which dropped the word ‘Donuts’ from its namesake chain about two years ago as it broadened its emphasis, extended its market share during the pandemic partly through wide availability of drive-thru and delivery.
In a recent note, KeyBanc analyst Eric Gonzalez said, “The market is just a start to praise Dunkin’ for the capabilities it has put in a position to achieve sustainable development”. He said it was interesting to see the interest of Inspire Brands in a well-run business such as Dunkin’ given the previous focus of the acquirer on “turning around struggling brands”.