Dunkin' Sets IPO Price Range

By LYNN COWAN And MIA LAMAR

Doughnut chain Dunkin' Brands Group Inc. came one step closer to throwing open its doors to a public offering Monday, setting the price terms for its deal.

The company wants to sell 22.25 million shares at a price between $16 and $18, for a raise of about $401.4 million. It plans to trade on the Nasdaq under the symbol DNKN.

Though most IPOs immediately launch a marketing road show and begin trading about two weeks after they have filed their terms, people close to the deal say the road show hasn't launched and the date of trading hasn't been fixed yet.

Dunkin' Brands franchises quick-service restaurants that serve coffee and baked goods under its Dunkin' Donuts brand as well as Baskin-Robbins ice cream.

In 2006, the Massachusetts-based company was purchased from liquor company Pernod Ricard SA for $2.4 billion in cash by a trio of private-equity firms: Bain Capital Partners LLC, the Carlyle Group and Thomas H. Lee Partners. It is the latest private-equity-backed offering to arrange to go public in the U.S. this year.

Earlier this year, private-equity-backed hospitals operator HCA Inc. and energy company Kinder Morgan Inc. completed successful IPOs of more than $1 billion each. While the offering from Dunkin' Brands isn't as big as either of those deals, the company's brand recognition is quite high among investors; both Dunkin' Donuts and the Baskin-Robbins brands date back to the 1940s.

Bloomberg News

Dunkin' Donuts IPO could land its private-equity owners a windfall. Read more on Deal Journal.

In fiscal 2010, which ended Dec. 25, the company's total revenue rose 7% to $577 million compared to fiscal 2009, primarily on higher systemwide sales from Dunkin' Donuts. Operating income increased 5% to $194 million. Net income decreased 23% to $27 million for fiscal 2010 due to a $62 million pretax loss on debt extinguishment. Same-store sales rose 2.3% at Dunkin' Donuts and declined 5.2% at Baskin-Robbins.

Dunkin' Brands plans to use the proceeds to repay debt and for working capital and general corporate purposes, according to a filing with the Securities and Exchange Commission.

Joint bookrunners on Dunkin' Donuts offering are J.P. Morgan Chase & Co., Barclays PLC's Barclays Capital Inc., Morgan Stanley, Bank of America Corp.'s Bank of America Merrill Lynch and Goldman Sachs Group Inc.