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Dunkin Donuts IPO

In another sign that capital markets are improving – and it’s not just tech companies that are benefiting – Dunkin’ Donuts went public today. According to the Wall Street Journal article, Dunkin’ Brands Group Inc., the parent company of Dunkin Donuts, priced its shares at $19 a share and raised $427.5 million. All of you who are Dunkin’ Donut fans, or are fans of their coffee which apparently now contributes over half of their sales, can now expect to see more Dunkin’ Donuts shops as the funds will be used to fuel expansion and pay down debt.

I’m also mentioning this IPO because, according to the WSJ article, Dunkin’ Brands is owned by private equity firms Bain Capital Partners LLC., Carlyle Group and Thomas H. Lee Partners, which bought it in 2006.” The article goes on to say, “They will maintain a controlling interest; about 20% of the shares outstanding are being floated.” This IPO gives the private equity firms who bought the company a liquidity event or an exit (or partial exit, in this case) in five years, well within the 5 – 7 year typical exit period. It is true that these particular private equity firms, as seems to be the case now and in the last several years with large private equity firms, took on large amounts of debt in order to obtain the cash to provide them with large dividend distributions in the early years after the acquisition finalized. So there has been one or more liquidity events already. However, to completely exit their equity ownership positions they’d either have to sell to another entity (another company or private equity firm) or take the company public. And private equity firms, like venture capitalists, always like having the option of an IPO, whether or not they use it, because it increases the options and raises the value.

Just another thought in my continuing focus on the increasing activity by equity investors.

 

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About Tiffany C. Wright

Hi! I,Tiffany C. Wright, am the author of the ebook, "Help! I Need Money for My Business Now!!" and the book "Solving the Capital Equation: Financing Solutions for Small Businesses", available on Amazon. I am the president of Toca Family Business Services, a short-term & project-based interim management & strategic and financial advisory firm, located in Atlanta, Georgia. In the past five years I've helped small and medium companies restructure and obtain over $31 Million in financing and a similar amount in purchase orders and contracts. I have an MBA in Finance and Entrepreneurial Management from the Wharton School of Business at the University of Pennsylvania and a B.S. in Industrial and Systems Engineering from The Ohio State University. Personal: I enjoy investing. I am a prodigious reader of everything from business books, magazines, and newspapers to horror and popular fiction. I read 4-6 books per month. I also love to travel. I've been to 33 countries on 5 continents and lived in Japan for 2.5 years and aim for a foreign locale twice a year. I am also an athlete and run track on the Master's Circuit. The highlight was placing 7th in my age group in the 2007 World Master's Track and Field Championships in Italy.

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The Resourceful CEO, Tiffany C. Wright

the president of Toca Family Business Services, a strategic and financial advisory firm which provides short-term & project-based C-level management. She is the author of Solving the Financial Equation: Financing Solutions for Small Businesses, available on Amazon.

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