- WHITE PAPERS
Dunkin' Brands Group Inc., parent company of Dunkin' Donuts and Baskin-Robbins, has officially gone public. The company today announced its initial public offering of 22,250,000 shares of its common stock at a price of $19 per share.
Those shares began trading today on The NASDAQ Global Select Market under the symbol DNKN. To celebrate the new listing, the NASDAQ is changing its name for today only to "NASDDAQ."
The offering is being made through an underwriting group led by J.P. Morgan Securities LLC, Barclays Capital Inc., and Morgan Stanley & Co. LLC, along with BofA Merrill Lynch, and Goldman, Sachs & Co. Acting as co-managers are Robert W. Baird & Co. Incorporated, William Blair & Company LLC, Raymond James & Associates Inc., Stifel, Nicolaus & Company Incorporated, Wells Fargo Securities LLC, Moelis & Company LLC, SMBC Nikko Capital Markets Limited, Samuel A. Ramirez & Company Inc. and The Williams Capital Group LP.
The underwriters have been granted a 30-day option to purchase up to an additional 3,337,500 shares.
A registration statement relating to these securities has been filed with and declared effective by the Securities and Exchange Commission.
Offering expected to heat up coffee wars
The 22.3 million shares at $19 raised $422.8 million. This price exceeded original expectations that had shares estimated to go at $16 to $18. According to analysts, the stock is especially attractive because of Dunkin's plans for growth.
The company has a strong presence in the New England region, but has been expanding aggressively for the past year-plus. Currently, there are about 6,800 Dunkin' units, with plans to double its presence within the next 20 years.
The public offering is expected to heat up the QSR coffee wars, as the item has surpassed donuts as Dunkin's signature product. In perspective, revenue at Dunkin' Brands outpaced McDonald's last year, 7.3 percent to 5.8 percent, even as McDonald's revenue increases have been steadily attributed to its McCafe line.
The Wall Street Journal added that Dunkin's new position should also put the pressure on Starbucks. Dunkin' Donuts sells more servings of hot regular coffee and iced coffee than any other chain in the U.S., including Starbucks. Dunkin's drink lineup accounts for 60 percent of the chain's total sales with a lower price-point than Starbucks that could attract budget conscious consumers.
Additionally, Dunkin' Donuts is testing four new sandwiches and three soups in 34 outlets in Western New York.
Dunkin' Brands has more than 16,000 points of distribution in 57 countries worldwide and is headquartered in Canton, Mass.
Click here to read more about operations management.