Dunkin' Brands Group Begins Trading on NASDAQ
CANTON, Mass. -- Trading of the Dunkin' Brands Group, parent company of Dunkin' Donuts and Baskin-Robbins, officially commenced on the NASDAQ Stock Market today. Dunkin' will trade under the symbol DNKN.
"In celebration of their initial public offering, NASDAQ is unofficially changing its name to NASDDAQ, incorporating Dunkin Donuts' iconic pink and orange D's into our traditional logo," said Bruce Aust, executive vice president, NASDAQ OMX Corporate Client Group. "NASDAQ is elated to welcome Dunkin' Brands, a leader in consumer brand loyalty across a variety of categories in the quick-service restaurant business, to the NASDAQ family."
Dunkin' Brands Group's initial public offering (IPO) was priced at $19 per share yesterday evening, according to a Wall Street Journal report, and raised $427.5 million. Private equity firms Bain Capital Partners LLC, Carlyle Group and Thomas H. Lee Partners purchased Dunkin' Brands for $2.4 billion in 2006. The firms will maintain a controlling interest following the IPO; approximately 20 percent of the outstanding shares are being floated.
The company plans to use the funds from the IPO to pay off debt and expand its chain of stores beyond the Northeast, according to the report, opening as many as 250 new locations in the next two years. Its long-term goal is to double the number of Dunkin' Donuts locations over the next 20 years.
Dunkin's prospectus states that its expansion "has the potential, over approximately the next 20 years, to more than double our current U.S. footprint and reach a total of 15,000 points of distribution in the U.S."
This aggressive growth strategy could heat up competition when it comes to coffee sales. Coffee and other drinks constitute 60 percent of the company's U.S. sales, said Dunkin', and recent NPD market research data found that the company sells more servings of hot regular coffee and iced coffee than any other fast-food chain. Starbucks is in second place, followed by McDonald's and Canadian chain Tim Hortons, according to Robert Passikoff of consumer and brand loyalty consulting firm Brand Keys Inc.
The strongest competition is likely to be between Dunkin' and McDonald's, according to the Wall Street Journal report. Dave Jenkins, co-founder of CustomersDNA, speculated that the chains may engage in price wars if Dunkin' Donuts expands into McDonald's territory.
Dunkin' Brands Group currently has more than 16,000 points of distribution in 57 countries worldwide, according to the NASDAQ announcement. As of the end of 2010, the company operated 9,760 Dunkin' Donuts locations and 6,433 Baskin-Robbins locations, nearly 100 percent franchised, with systemwide sales of $7.7 billion.