Donut giant Dunn is happy to take privatization, stock price soars nearly 20%

Donut giant Dunn is happy to take privatization, stock price soars nearly 20%

  文|Liu Shuo

   Sina Finance News October 26, US Eastern Time, Dunkin is actively negotiating with the non-listed company Inspire Brands on the sale. The company’s valuation of Dunkin is close to US$9 billion, and the purchase price is higher than Dunkin’s Friday There is a 20% premium to Dunn’s share price. On Monday, Dunn’s share price rose 16%.

   Dunkin’ Brands, the parent company of the famous donut chain Donn, said today that it may sell Dunkin’ Brands to Inspire Brands, which owns several American fast food chain brands. Inspire Brands is the chain restaurant Arby’s Hesu The parent company of Jimmy John’s.

   The New York Times, which disclosed the news, reported that the value of the transaction was US$8.8 billion, or US$106.50 per share, which was 20% higher than the closing price on Friday. The company’s current stock price is $102.55 and the market value is $8.4 billion. This year it has risen by 38%.

   Benefited from the investment in its digital business before the outbreak of the new crown, which helped it provide contact-free takeaway services, Dunn performed well during the epidemic. More work-at-home models have also allowed chain stores to reach customers during non-morning peak periods, thus supporting the development of high-end products such as espresso and specialty beverages. At present, beverage revenue accounts for more than half of Dunn’s total revenue. After the reform last year, the company removed Dole from its name.

   Compared with Starbucks’ same-store sales, which fell 40% in the previous quarter, Dunn’s same-store sales fell by 18.7% in the second quarter and announced the closure of 800 stores. However, fast car pickup channels, the addition of new drinks, and cooperation with TikTok Internet stars have all helped the brand’s sales recover. The current 21,000 stores are franchise stores. Last year’s revenue was US$1.4 billion and profit exceeded US$240 million.

   Jefferies analyst Andy Barish said that given the current valuation of Dunn and the opportunities brought to Inspire Brands after the merger, he does not expect the merger to be too competitive. If Dunn is acquired, It will more than double the total number of Inspire Brands restaurants and add more international markets.

  Inspire’s strategy is to improve the company’s digital operations while maintaining brand independence. The company’s chief executive Paul Brown has stated that he wants to reform the company like the Hilton Hotel where he once worked.

   For Brown, if this acquisition is successful, it is also in line with his business plan to operate a large-scale catering brand with growth potential. He once said in an interview: “We hope to have a broad brand portfolio and achieve scale value through acquisitions. This has played a big role in the portfolio in the past few months.”

   In 2019, He has acquired the sandwich store Jimmy John’s at a private price, and Dunn, which is worth $9 billion, will set a record high for his purchase. Based on Inspire Brands’ statement and previous acquisitions, Dunn’s fans should not worry about any drastic changes in this beloved brand. Inspire Brands stated on its website that the company’s goal is to maintain the characteristics of the brands it buys.

  Wall Street predicts that when Dunn announces third-quarter earnings on Thursday, the numbers will increase further. According to Bloomberg data, analysts expect the company’s revenue to be about 345 million U.S. dollars and profit per share of about 76 cents, higher than the second quarter’s revenue of 287.4 million U.S. dollars and profit per share of 44 cents.

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