Dunkin’ Brands holds acquisition talks with Arby’s owner Inspire Brands

Dunkin' said it has held “preliminary” discussions with the Roark Capital-owned multi-brand operator.
Photograph: Shutterstock

Dunkin’ Brands on Sunday acknowledged that it has held talks on a potential sale to Arby’s owner Inspire Brands.

Karen Raskopf, chief communications officer for the Canton, Mass.-based owner of Dunkin’ and Baskin-Robbins said the company held “preliminary discussions” with Inspire.

“Dunkin’ confirms that it has held preliminary discussions to be acquired by Inspire Brands,” Raskopf said in an emailed statement. “There is no certainty that any agreement will be reached. Neither group will comment further unless and until a transaction is agreed.”

The comment came in the aftermath of a New York  Times report Sunday that Dunkin’ is in talks with Inspire, the Atlanta-based brand operator owned largely by the private equity firm Roark Capital. The Times said the deal would value Dunkin’ at $9 billion.

Dunkin’ currently has a market capitalization of $7.3 billion and an enterprise valuation of $9.8 billion, according to data from the financial services site Sentieo. The company closed trading on Friday at $88.79 per share, an all-time high since its 2011 initial public offering.

A go-private deal involving Dunkin’ has been rumored for some time. The company has long been considered a potential target for a number of large, financially strong brand-collecting companies, though the investment firm JAB Holdings, owner of Panera Bread, was thought to be the most likely buyer.

In addition to Arby's, Inspire's operates Buffalo Wild Wings, Sonic, Jimmy John's and Rusty Taco. 

Yet Inspire, created in 2018 when Arby’s acquired the casual dining chain Buffalo Wild Wings, has been on a shopping binge. Since then, the company has bought the burger chain Sonic and folded in the sandwich chain Jimmy John’s, also owned by Roark. Dunkin’ gives Inspire two more brands, notably the beverage concept Dunkin’.

That would be Inspire’s largest acquisition by far and would give the company one of the 10 largest chains. It would be the restaurant industry’s largest deal since the 2014 sale of Tim Hortons to Burger King, a deal that created the brand operator Restaurant Brand International.

Dunkin’, the coffee chain, has been among the industry’s steadiest concepts over the years. Global system sales exceeded $10 billion in 2019, according to data from Restaurant Business sister company Technomic, up nearly 77%. The bulk of that, $9.3 billion, is in the U.S.

It is the eighth largest restaurant chain in the U.S. based on system sales. But it is the fourth largest chain in terms of unit count, with more than 9,600 at the end of last year, according to Technomic.

Yet Dunkin’ has considerable room for growth, both in the U.S. where the company has been expanding further west from its Northeastern roots, and internationally. The company has been locked in an intensifying battle for coffee supremacy with the Seattle-based giant Starbucks.

Ironically, the pandemic has been good for Dunkin’ since then: It gave consumers in many of these western markets reason to try the chain, which has a number of drive-thrus in its newer markets. Customers have flocked to drive-thrus since the outset of the quarantine in March.

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