Dunkin' Brand Group, the parent company of the Dunkin' coffee and doughnuts chain, confirms it is in talks with private equity-backed holding company Inspire Brands for a possible merger. The acquisition is expected to result in the privatization of the company.
Sources with knowledge of the negotiations said both companies might announce a deal this week. The company's shares are expected to open Monday in New York unchanged from their Friday close of $88.79, according to pre-market trading.
"Dunkin' Brands confirms it has held preliminary discussions to be acquired by Inspire Brands," Dunkin' representative Karen Raskopf said in a statement.
The New York Times reported Inspire Brands planned to take Dunkin' private by purchasing it at $106.50 a share. At that price, the deal values Dunkin' at $8.8 billion. The offer is a 20% premium over Dunkin's last-traded price.
The company declined to provide any other details. However, its representative did say no finalized agreement has been made and there was a possibility there would be no deal.
If a deal does materialize, it will be the latest in a series of acquisitions for Inspire Brands. The company, which owns Buffalo Wild Wings and Jimmy John's, is financially backed by Roark Capital.
Dunkin' originally went public in 2011, six years after it was bought by a consortium that included Carlyle Group, Bain Capital and Thomas H. Lee Partners. The group purchased the company from Pernod Ricard for $2.4 billion.
Dunkin's stock has performed well over the past few months despite the world health crisis. Since March, the stock price has more than doubled thanks to market-participant confidence in the company's business plan. During the pandemic, the company strengthened sales thanks to its mobile ordering app, delivery services and loyalty program.
The closing of smaller coffee and pastry shops helped Dunkin' gain an increased market share. With fewer competitors, larger companies such as Starbucks and McDonald's have thrived.
