News Column

Dunkin' Donuts IPO (DNKN)

May 5, 2011

By The Associated Press

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

Dunkin' Brands Group 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 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 its stores are owned by franchisees.

The company was taken private in 2005.

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.

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% of its stores' revenue comes from coffee drinks, which offer high profit margins. In 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 market under the ticker symbol "DNKN."


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Source: Copyright USA TODAY 2011


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