Sugar high: Dunkin’ shares soar after buyout talks confirmed

Shares of Dunkin’ Brands Group rocketed to an all-time high at the opening bell on Monday after the doughnuts and coffee chain confirmed it has held talks to be taken private by a private equity firm.

Dunkin’ said it is in preliminary discussions with Inspire Brands, which also owns Arby’s and Jimmy John’s Sandwiches. In a prepared statement on Sunday, Dunkin’ said it was not yet certain a deal would be reached and would not comment further.

Inspire Brands said it had no comment on Monday, but Dunkin’ shares jumped 16 percent to $104.87.

Dunkin’, based in Canton, Massachusetts in the United States, also owns the Baskin-Robbins ice cream chain. There are 13,000 Dunkin’ stores and 8,000 Baskin-Robbins outlets worldwide.

Both brands have a significant history. Dunkin’ was founded in 1950 in Quincy, Massachusetts. Baskin-Robbins – known for its promise of 31 flavours – was founded in 1945 in Glendale, California.

But the global coronavirus pandemic has hurt sales of both firms. Dunkin’ Brands revenue fell 20 percent in the second quarter, and the company said franchisees closed 200 restaurants permanently. Dunkin’ Brands reported full-year sales of $1.4bn in 2019, up four percent from the previous year.

Atlanta, Georgia’s Inspire Brands, which was founded in 2018, has quickly placed itself among the largest restaurant groups in the US. It also owns the Buffalo Wild Wings and Sonic burger chains, and has annual sales of more than $14bn.

Dunkin’ would give Inspire a spot in the breakfast category, which was the fastest-growing segment of the restaurant industry before the pandemic hit.

Inspire is part of the private equity company Roark Capital Group, also based in Atlanta. Roark also backs Focus Brands – the owner of Auntie Anne’s Pretzels and Cinnabon – and CKE Restaurants, which owns the Carl’s Jr and Hardee’s burger chains.