Published January 13, 2015
Pernod Ricard SA agreed to sell Dunkin' Brands to three U.S. private equity firms for $2.43 billion, the French drinks giant said Monday.
Pernod announced the sale to Thomas H. Lee Partners, the Carlyle Group and Bain Capital four days after bidding closed in an auction for the U.S. fast food company — owner of the Dunkin' Donuts chain, Baskin-Robbins ice cream parlors and Togo's sandwich stores.
Pernod said the sale will be completed early next year, subject to regulatory approval.
The Paris-based drinks maker announced plans to sell Dunkin' Brands after acquiring its former British parent Allied Domecq PLC in July.
"The sale of Dunkin' Brands, within our expected timetable, is excellent news for Pernod Ricard as it allows us to accelerate the reduction of our debt," Pernod Chairman and CEO Patrick Ricard said in an e-mailed statement.
Boston-based Bain Capital has invested in more than 225 companies over the last two decades, including Domino's Pizza, Inc.(DPZ) and Burger King Corp. Investments by T. H. Lee, also a Boston firm, include Snapple Beverage Corp.
Washington, D.C.-based Carlyle, with $35 billion under management, is the largest of the three successful joint bidders.
The three companies will invest equal amounts of equity in the company, according to a joint press release. The consortium plans to leave the existing Dunkin' Brands management team in place, including Chief Executive Officer Jon L. Luther.
"We are delighted to partner with Jon Luther and his terrific team, as well as the entire Dunkin Brands franchise community, to help achieve the organization's ambitious growth plans," said Bain Capital in a written statement.
Thomas H. Lee Partners added: "This is a company with well over 10 years of growth ahead of it, both in the U.S. and in international markets, and this sponsor team has made a long-term commitment to realize that potential."
Dunkin' Brands three restaurant chains collectively generated $4.8 billion in revenue last year. Dunkin' Donuts, however, is widely considered the crown jewel of company, with a 12 percent increase in sales last year and more than 6,000 locations worldwide.
Founded in 1950 with one store in Quincy, Mass., Dunkin' Donuts is now the largest U.S. doughnut franchise. It has more than 6,000 stories in 30 countries, drawing 2.7 million customers each day.
While the greatest concentration of stores is in New England, the company is expanding westward with a goal of 15,000 stores to take on rival Starbucks Corp. (SBUX). Dunkin' Donuts has introduced its own high-end coffee drinks as it tries to muscle in on Starbucks' dominance in that market.
British beverage company Allied Domecq PLC bought Dunkin' Donuts in 1990. In April, Allied announced a $14.2 billion takeover by Pernod, its French rival whose brands include Martell cognac and Jacob's Creek wine.
Pernod officials said that the acquisition strengthened their position against a rival liquor company, and analysts surmised that the company would deal Dunkin' Brands. Talks began shortly after the acquisition.
Pernod spokeswoman Florence Taron declined to identify any of the other bidders or say when they had been eliminated from the auction.