DNKN - Dunkin' Brands

[DCG]

Anyone else keeping an eye on their IPO tomorrow? I won't be buying into the IPO, but am planning on looking at it once the dust settles from the offering.

 

Dunkin Brands is the parent company of Dunkin' Donuts and Baskin Robins. The company has been around since the 1940's, and is virtually everywhere here in the Northeast U.S.. They are planning on expanding Dunkin Donuts more outside of the Northeast, and all of their stores are franchised. I've been wondering for years why they haven't expanded earlier in their nearly 70-year history, but it sounds like they're now going to try to increase their growth through new locations.

 

Dunkin' Brands has more than 16,000 stand-alone stores, gas station kiosks and other points of distribution in 57 countries. Almost all are franchised operations. The Dunkin' Donuts segment, which accounted for 76% of revenue last year, has 9,805 stores and other sales locations, mostly in the U.S. 2010 revenue was $577 million, 7% higher than 2009. Operating income increased 5% to $194 million. Net income decreased 23% to $27 million for fiscal 2010 due to a $62 million pre-tax loss on debt extinguishment. Same store sales rose 2.3% at Dunkin' Donuts and declined 5.2% at Baskin-Robbins.

 

The downside is that the company will have about $1.5 billion of debt, even after the IPO (it's planning on using the gains from the IPO to pay down debt). A nearly 100% franchise model can be risky as well.

 

I'll have to wait until I see more financials to look into a valuation, but it's a good brand that I think can translate well nationally.

[hyten1]

dunkin and 7eleven have always intrigue me, never had a chance to buy it

 

 

[smo001]

DCG, I came across this article this morning on the reformed broker. May pique your interest.

 

http://www.bluemaumau.org/observations_dunkin%E2%80%99_brands_road_show_st_regis_edition

[Kraven]

Their coffee is really good.  Perhaps the best "cheap" coffee around.  I'm not sure that adds anything to the discussion though.

[Tim Eriksen]

The S-1 filing appears to have nicely detailed proforma numbers.

 

http://www.sec.gov/Archives/edgar/data/1357204/000119312511195243/ds1a.htm#rom211233_9

 

It shows $0.72 in proforma EPS based on 120 million shares outstanding.  If it actually prices at $17 that is too rich of a valuation for me.  $2 billion of equity plus $1.5 billion of debt = EV of $3.5 billion.  Revenue in 2010 was $577 million.  Operating Income of $200 million.  EBITDA about $260 million.  

[DCG]

DCG, I came across this article this morning on the reformed broker. May pique your interest.

 

http://www.bluemaumau.org/observations_dunkin%E2%80%99_brands_road_show_st_regis_edition

 

Thanks for posting that. The author of is a former Dunkin' Donuts Franchisee (who possibily did not do a job job at running his business) that clearly has a vendetta against the company (so much that he even wrote a book to trash them, and is partially using the article to promote his book), so you have to take a lot of his claims with a grain of salt, but he does bring up some points that may be valid.

 

ETA: The author's website also shows that he is currently in a law suit with the company. I don't know whether his claims in the article are valid, but he is clearly on a mission to trash the company and discourage people from investing in it.

[smo001]

DCG, I came across this article this morning on the reformed broker. May pique your interest.

 

http://www.bluemaumau.org/observations_dunkin%E2%80%99_brands_road_show_st_regis_edition

so you have to take a lot of his claims with a grain of salt

 

DCG,

 

Agreed. You don't build a franchise of their size without stepping on some toes. And it will be on my watch list as well. But with the amount of leverage they have I have a feeling they will get much cheaper soon enough.  ;D

[smo001]

dunkin and 7eleven have always intrigue me, never had a chance to buy it

 

 

 

Hyten,

 

You can still can. One to be listed tomorrow and another on the TSE.

 

http://www.7andi.com/en/ir/index.html

[rkbabang]

I'm going to be watching with interest.  I was a long time Dunkin' Donuts shareholder when they were taken private.  I made out well.  Now though,  I'll have to do some more research before deciding if I'll getting back in. The debt concerns me.

[fareastwarriors]

Dunkin’ Brands Says It’s in Talks to Be Acquired by Inspire

 

 

https://www.bloomberg.com/news/articles/2020-10-25/dunkin-brands-near-deal-for-9b-sale-to-inspire-brands-nyt?srnd=premium

 

 

The New York Times reported the talks earlier, saying Inspire will take Dunkin’ private at $106.50 a share, citing two people with knowledge of the negotiations who weren’t identified. The deal -- valued at $8.8 billion -- could be announced as soon as Monday, the newspaper added. The price is a 20% premium over Friday’s closing price, when the company had a market capitalization of $7.3 billion.