Operations

Inspire Brands' acquisition of Dunkin’ will more than double company's size

In a mammoth deal announced Saturday, 11,000-unit Inspire Brands signed a merger agreement with 20,500-unit Dunkin' Brands for a move that may signal some changes ahead in the overall QSR landscape.

Photo: iStock

November 2, 2020

Inspire Brands reached a deal this weekend to acquire Dunkin' and Baskin-Robbins' parent company, Dunkin' Brands for $106.50 per share or approximately $11.3 billion, including assuming the company's debt.

Through the massive transaction Inspire – already the parent of four brands with 11,000 locations – adds Dunkin' Brands' more than 20,500 Dunkin' and Baskin-Robbins stores, the company said in a media release.

In total when the agreement is finalized, Inspire Brands' combined portfolio will represents a total of:

$26 billion in systemwide sales.
More than 31,600 locations in more than 60 countries.
More than 3,200 franchisees.
600,000 company and franchise employees.
25 million loyalty members.

Inspire Brands' current portfolio includes QSRs Arby's and Sonic, as well as the fast casual brands, Jimmy John's and Buffalo Wild Wings. Collectively, they have approximately $15 billion in annual systemwide sales.

Inspire Brands said the goal of the transaction was to corral a family of complementary but still highly differentiated brands. The agreement was unanimously approved by both companies' boards.

The tender offer of $106.50 per share in cash on all outstanding shares represents a premium of approximately 30% to Dunkin' Brands' 30-day volume-weighted average price and a premium of approximately 20% per share to Dunkin' Brands' closing stock price on Oct. 23.

"Dunkin' and Baskin-Robbins are category leaders with more than 70 years of rich heritage, and together they are two of the most iconic restaurant brands in the world," Inspire Brands co-founder and CEO Paul Brown, said in the release.
"By joining Inspire, these brands will add complementary guest experiences and occasions to our current portfolio. Further, they will strengthen Inspire through their scaled international platform and robust consumer packaged goods licensing infrastructure, as well as add more than 15 million loyalty members."

Dunkin' Brands CEO Dave Hoffmann credited the work of the company's franchisees, licensees, employees and suppliers with transforming both of the companies brands into modern relevant players in the QSR marketplace.

"This team's grit and determination has enabled us to deliver outsized performance and made our brands among the most elite in the quick-service industry," Hoffmann said in the release. "I am particularly proud of our actions since March of this year. During the global pandemic, we have stood tall. We've had each other's backs and are now stronger than ever.
"We are excited to bring meaningful value to shareholders who have been with us on this journey and believe that Inspire Brands, a preeminent operator of franchised restaurant concepts, will continue to drive growth for our franchisees while remaining true to all that is unique and special about the Dunkin' and Baskin-Robbins brands."

The closing of the tender offer will be subject to certain conditions, including the tender of shares representing at least a majority of the total number of Dunkin' Brands' outstanding shares, the expiration or termination of the antitrust waiting period, and other customary conditions.

Following the successful completion of the tender offer, Inspire will acquire all remaining shares not tendered in the tender offer through a second-step merger at the same price. The transaction is expected to close by the end of 2020.

The brands did not relay how or if Inspire or Dunkin's leadership would be altered in any way upon the agreement's completion. A brand spokesman told QSRweb this morning that they are focused on closing the transaction by year's end and have not yet made any decisions on leadership.