Inspire Brands’ $9bn acquisition of Dunkin’ Brands

By Zahra Malik, Devi Vanalia, Baliny Ganeshakumaran, Deimante Chailenko and Matilda Oculy (The University of Manchester)


Overview of the deal

Acquirer: Inspire Brands

Target: Dunkin’ Brands

Implied Equity Value: $8.8bn

Total Transaction Size: $8.8bn

Closed date: TBC

Target advisor: n/a

Inspire Brands is in talks to acquire Dunkin’ Brands for nearly $9bn. The takeover would be the restaurant industry’s biggest since the 2014 sale of Tim Hortons to Burger King. Inspire’s offer of $106.50 a share represents a 20% premium over Dunkin’s closing price on Friday, which was near all-time highs. The deal would value Dunkin’s equity at $8.8bn. Accounting for the $3bn in net long term debt, Inspire would be paying an enterprise value of over 26 times forward EBITDA. Inspire could help the doughnut and coffee chain expand in the underpenetrated Midwest and West Coast markets. The acquirer operates about 10,900 restaurants across five brands, generating more than $14bn in annual sales. Dunkin’ would add about 21,000 global locations with $12bn in sales. The deal with Inspire would return Dunkin to private equity control after nine years on the public markets. Inspire’s typical strategy is to improve companies’ digital operations while keeping their brands separate. Owning a dominant chain like Dunkin’ could be the final touch Inspire needs before going public.

“There is no certainty that any agreement will be reached” - Karen Raskopf, Chief Communications Officer of Dunkin’ Brands

Company Details: Acquirer – Inspire Brands

Inspire Brands, formerly named Arby’s Restaurant Group, is the fourth largest multi-brand restaurant chain group with a portfolio of more than 11,000 restaurants in 14 countries. It is owned by the private equity firm Roark Capital Group and has 1,400 franchisees. Its most famous brands are Buffalo Wild Wings, Arby’s, Sonic and Rusty Taco. Inspire Brand’s latest acquisition was Jimmy John’s Franchisor SPV, LLC in September 2019.

Founded: February 5, 2018

Headquartered: Atlanta, GA, United States

CEO: Paul J. Brown

Number of employees: 325,000+ (including franchise employees)

LTM Revenue: $14.6 Billion

Company Details: Target - Dunkin’ Brands Group

Dunkin’ Brands Group operates in over 30 countries in a 100% franchised business model. Dunkin’ Brands is the parent company of Dunkin’ and Baskin-Robbins, two quick service restaurant chains which operate more than 12,900 and 8,000 locations respectively. They serve coffee, baked goods, doughnuts, and ice cream.

Founded: 1950

Headquartered: Canton, MA, United States