Three firms buy Dunkin' Donuts parent company
Three private equity firms confirmed Monday that they had agreed to buy the parent of Dunkin' Donuts for $2.4 billion.
Bain Capital Partners, the Carlyle Group and Thomas H. Lee Partners are acquiring Dunkin' Brands, a franchiser of Dunkin' Donuts restaurants, from Pernod Ricard, the French wine and spirits company.
Beginning with a single store in Quincy, Mass., in 1950, Dunkin' Donuts has grown to 6,500 franchises worldwide, with a big concentration in the Northeast and mid-Atlantic states.
The new owners hope to expand Dunkin' Donuts' presence across the United States, marketing it as a lower-priced alternative to Starbucks.
"Dunkin' is so much more than a doughnut company," said Anthony DiNovi, co-president of Thomas H. Lee Partners. Both Dunkin' Donuts and Starbucks "are continuing to take share from mom-and-pop coffee shops," he said.
Jon L. Luther, chief executive of Dunkin' Brands, which is based in Canton, Mass., said, "We sell over one billion cups of coffee a year. We really do compete as a coffee company with a bakery."
Dunkin' Donuts accounts for more than 80 percent of the revenue of Dunkin' Brands, Luther said. The parent company also controls the Baskin-Robbins ice cream chain, with 5,600 shops worldwide, and Togo's sandwich shops, with more than 350 stores in the United States.
The company was put up for sale after Pernod completed its $14 billion acquisition this year of Allied Domecq, the British liquor company, which had owned the chain.
The purchase by the three private equity firms is scheduled to close in the first quarter of 2006. J.P. Morgan and the law firm of Debevoise & Plimpton advised Pernod on the sale.
Dunkin' Donuts reported revenue of $4.8 billion last year with a gross profit of $362 million, according to Pernod Ricard's annual report.
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