Industry News | December 8, 2005

Two Groups Expected to Bid for Dunkin' Donuts

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Two groups of private-equity firms plan to submit bids Thursday to buy Dunkin' Donuts, the nation's biggest coffee-and-doughnut chain, from the French company that acquired it as part of a bigger deal last summer, two people familiar with the groups' plans told a reporter with the Associated Press.

Thursday was the deadline to submit bids to buy Dunkin' Brands Inc., which was purchased by France's Pernod Ricard SA in July as part of its $13 billion acquisition of Britain's Allied Domecq PLC.

In addition to Dunkin' Donuts, Canton, Mass.-based Dunkin' Brands owns the Baskin-Robbins and Togo's restaurant chains. The three units collectively generated $4.8 billion in global revenue last year.

Pernod Ricard spokeswoman Florence Taron said Thursday the sale of Dunkin' Brands was "in progress," the AP reports.

"There are some offers," she said, declining further comment.

Details about how much was being offered could not be determined. Analysts have estimated Dunkin' Brands might sell for more than $2 billion.

One bid is coming from a group that includes Boston-based Bain Capital and Thomas H. Lee Partners along with Carlyle Group of Washington, D.C., said a person familiar with the plans who asked not to be identified by name because the firm does not comment on investment deals before they are finalized.

Another person familiar with the plans said another bid was being prepared by JP Morgan Partners — a unit of JP Morgan Chase & Co. — and Rhode Island-based Providence Equity Partners Inc. That person also asked not to be identified by name because of a similar policy against commenting on pending deals.

A third consortium made up of Kohlberg Kravis Roberts & Co. and Trimaran Capital Partners also was considering a bid, the Daily Deal reported Wednesday. KKR spokesman David Lilly declined to comment to The Associated Press on Thursday. A phone call seeking comment from Trimaran was not immediately returned.

Pernod Ricard said when the deal for Allied Domecq closed that it expected to unload Dunkin' Brands by the end of the year because the restaurants don't fit in with Pernod Ricard's liquor business. Pernod Ricard also said it needed cash from a sale to finance its acquisition of Allied Domecq.

Industry analysts expect plenty of interest because of the Dunkin' Donuts chain's fast growth. Dunkin' Donuts' $3.4 billion in U.S. revenue last year was a 13 percent increase over the previous year — more than double the 5.4 percent growth for the U.S. food service industry.

Recent growth at the 55-year-old franchise chain has largely come from coffee sales and an expanded beverage menu that includes espresso and iced drinks.

Dunkin' Donuts says its more than 6,000 stores worldwide in 30 countries draw more than 2.7 million customers per day. Over 4,400 of those stores are spread across 36 U.S. states. The greatest concentration is in New England, but Dunkin' is expanding westward and has a long-term goal of growing to 15,000 locations.

News and information presented in this release has not been corroborated by QSR, Food News Media, or Journalistic, Inc.