Dunkin’ Brands Group Inc. may seek to raise about $500 million in its initial public offering, 25 percent more than the coffee-shop chain initially filed to sell.
The Canton, Massachusetts-based company may complete the offering by the end of July. Dunkin’ filed with the U.S.Securities and Exchange Commission for a $400 million IPO on May 4.
Dunkin’ follows private equity-backed companies such as HCA Holdings Inc. and Kinder Morgan Inc. in returning to the public market this year after leveraged buyouts. Private equity owners have completed the biggest U.S. IPOs in 2011 as a U.S. stock market near a three-year high increased investors’ demand for companies acquired through debt- fueled acquisitions before credit markets started to freeze four years ago.
Bain Capital LLC, Carlyle Group and Thomas H. Lee Partners LP paid about $2.43 billion five years ago for Dunkin’, which competes with coffee chains such as Starbucks Corp. and Canada’s Tim Hortons Inc.
The firms each contributed $345.5 million of equity to the deal in addition to management’s $25 million, with the rest of the cost financed with debt. Carlyle marked its investment at 1.55 times as of March 31, putting the enterprise value of the company at $3.5 billion, including $1.8 billion in long- term debt.
HCA, the Nashville, Tennessee-based hospital chain, gained 9.2 percent through yesterday since owners including KKR & Co. and Bain brought it public in a $4.35 billion IPO in March. Nielsen Holdings NV, the television ratings company owned by Blackstone Group LP, Carlyle, KKR and Thomas H. Lee, rose 33 percent since its $1.89 billion IPO in January. Initial offerings in the U.S. overall have returned less than 4 percent.
A record $1.6 trillion in leveraged buyouts were completed from 2005 to 2007.
Proceeds will be used to repay debt. The offering is being led by JPMorgan Chase & Co., Barclays Plc, Morgan Stanley, Bank of America Corp. and Goldman Sachs Group Inc.
Sales at Dunkin’ Brands increased 9.3 percent to $139.2 million in the three months ended March 26 from a year earlier. The company booked a net loss of $1.72 million, compared with net income of $5.94 million in the year-earlier period.
The doughnut chain has more than 16,000 locations in 57 countries under the Dunkin’ Donuts and Baskin-Robbins brands.
