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Thursday, May 5, 2011

Dunkin' Donuts Parent Files for IPO

Dunkin' Donuts Parent Files for IPO  

The parent company of Dunkin' Donuts and Baskin-Robbins says it plans to go public through an initial public offering worth an estimated $400 million, confirming weeks of Wall Street speculation.

Dunkin' Brands Group Inc. didn't say how many shares it will offer or when the offering will take place. But the company, based in Canton, Mass., did say in a regulatory filing that it believes it sees "significant opportunity" to expand in foreign markets and outside the Northeast U.S., where it is concentrated.

Dunkin' plans to use the proceeds from the offering plus a term loan to pay off about $475 million in debt and will use the rest for working capital and general corporate purposes.

The company also hopes to boost afternoon traffic with new snacks, and increase training for its franchisees. Almost all of its stores are owned by franchisees.

The company was taken private in 2005, a big year for buyouts, by the private-equity firms Bain Capital Partners, Carlyle Group and Thomas H. Lee Partners.

Since then, Dunkin' has focused intently on expanding throughout the world, announcing in February its first store in India. It's also expanded beyond the coffee-and-doughnuts menu in recent years, adding egg-white sandwiches to appeal to the health-conscious.

Earlier this year, Wall Street got a better glimpse into the private company's finances when it reported 2010 earnings. Dunkin' Brands said it reported earnings even though it was a private company because it had previously refinanced some of its debt, meaning it will have publicly traded debt when the company goes public.

The company said in Wednesday's regulatory filing that it lost $1.7 million in the first quarter of 2011, a big difference from $5.9 million in net income the year before.

Dunkin Donuts says that about 60 percent of its stores' revenue comes from coffee drinks, which offer high profit margins because they're relatively cheap to make. Over the past several years, it has positioned itself as something of an "anti-Starbucks," a place to get a good cup of coffee at a low price.

The company would trade on the Nasdaq Global Select Market under the ticker "DNKN."

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