CANTON, MA -- Dunkin' Brands shares began trading today on the Nasdaq under the ticker "DNKN."
The parent company of the Dunkin' Donuts coffee chain and Baskin Robbins ice cream stores has raised $422.75 million after pricing its IPO on Tuesday evening at $19 a share, above the high end of its forecast. It sold 22.25 million shares, as expected, in the offering. The stock jumped to $25.60 shortly after opening on the Nasdaq.
The IPO gives the Canton, MA-based company a market value of just over $2.4 billion. The company plans to use proceeds from the IPO to repay debt and to double the number of Dunkin' Donuts outlets in the United States over the next two decades. The chain has most of its stores on the East Coast and sees the West, where it has just over 100 outlets, as a key growth market.
Dunkin' Brands is parent to the some 9,800 Dunkin' Donuts coffee shops and 6,500 Baskin Robbins ice cream stores. Last year, coffee and beverage sales made up 60% of Dunkin' Donuts systemwide sales in the U.S.
Its IPO-fueled expansion plans are likely to heat up the battle against rivals Starbucks Corp., which has more than 11,000 cafés in the U.S. and McDonald's, which has been expanding its McCafé concept throughout its 14,000 U.S. restaurants.
Dunkin' Brands, which previously operated as a unit of Allied Domecq, is currently owned by private-equity groups Bain Capital, the Carlyle Group and Thomas H. Lee Partners, which acquired the company for about $2.4 billion in 2006. Those firms sold shares in the IPO, reducing their overall stake from 32% to 26%.
The company recorded profit of $26.9 million in 2010, on revenue of $577.1 million. It had $1.89 billion in debt, as of March 26, according to a recent regulatory filing.
Last year, select Dunkin' Donuts stores began testing the sale of single-cup pods of the retail chain's popular coffee that can be brewed at home in a variety of machines. In February, Dunkin' Brands Inc. signed a deal with Green Mountain Coffee Roasters to begin selling K-Cup portion packs of Dunkin' Donuts coffee at its stores this summer. | SEE STORY