Question: Please read the article: Why Dunkin Is Worth Nearly $9 Billion By Andrew Ross Sorkin, Jason Karaian, Michael J. de la Merced, Lauren Hirsch and
Please read the article:
Why Dunkin Is Worth Nearly $9 Billion
By Andrew Ross Sorkin, Jason Karaian, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni
Thats a lot of doughnuts
DealBooks Lauren Hirsch broke the news yesterday: Dunkin Brands is close to a $8.8 billion deal to sell itself to Inspire Brands, the restaurant operator backed by the investment firm Roark Capital. A deal could be announced as soon as today, sources say. Heres everything you need to know about the scoop (or SCP, if you will).
Dunkin has done well during a pandemic. The chain was investing in its digital business before the coronavirus outbreak, helping it offer contact-free takeout. Shifting work patterns mean more people are coming in later in the day, boosting premium products like espresso and specialty beverages, which diners may have bought from smaller, independent coffee shops before. (Drinks make up more than half of Dunkins revenue, and it dropped Donut from its name last year.)
Bankers have long considered the company, whose 21,000 Dunkin and Baskin Robbins outlets are all franchised, a takeover target. Some saw a potential buyer in JAB, the European investment firm that owns Krispy Kreme, Panera and a host of coffee chains.
Dunkins C.E.O., Dave Hoffman, stands to make $10.8 million if there is a change in control this year, $1 million more than last year, according to filings. Pent-up demand for deals led to a big jump in M.&A. transactions in the third quarter, and a Dunkin takeover could inspire other private equity firms to jump into the fray for pandemic-proof targets.
It would be a jewel in Inspire Brands portfolio. The Roark-backed conglomerate has been on a buying spree in recent years, acquiring chains like Arbys, Buffalo Wild Wings and Jimmy Johns. Inspires strategy is to improve companies digital operations while keeping their brands separate. (Its C.E.O., Paul Brown, has said he wants to organize the company like Hilton Hotels, where he once worked.) Owning a dominant chain like Dunkin could be the final touch Inspire needs before going public, as some expect though Inspire has never confirmed such plans.
Dunkin has been private before. It was owned by a consortium of private equity firms, led by Bain Capital, Carlyle Group and Thomas H. Lee Partners, who acquired it from Pernod Ricard in a $2.4 billion deal in 2005. The firms took it public six years later.
The deal isnt cheap, with Inspire offering a roughly 20 percent premium to Dunkins closing price on Friday, which was already near an all-time high. The availability of cheap debt and steady cash flow from the companys franchises should make it easy to finance, Lauren hears.
Heres what $8.8 billion could buy at Dunkin:
12 billion doughnuts
49 billion Munchkins
4.7 billion medium coffees
2.5 billion bacon, egg and cheese bagels
4.4 billion scoops of ice cream (3.5 billion with a waffle cone)
And a reminder: Dunkin isnt just a place for coffee and doughnuts its also a place to fall in love.
Then please answer the following questions:
1. What is the article about?
2. Give me a few possible reasons why they might be doing it, and also decide whether or not it is a good idea?
3. What is your opinion?
Please write 300 words in PRINT!
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