initial public offerings (IPOs) trading on American exchanges

Wednesday, July 27, 2011

Dunkin' shares rise on first day of trading

Dunkin’ Brands Group shares begin trading on the Nasdaq under the ticker “DNKN”, with a nearly 40% pop above their IPO price in initial open-market trades.

Dunkin’ Brands Group, owners of the Dunkin’ Donuts chain, yesterday afternoon priced its initial public offering at $19 per share, higher than the original estimated range of $16 to $18.
The offering is for 22.25 million shares. Given that Dunkin’ expects to have 126 million shares outstanding after the offering, the company would be valued at $2.4 billion.

The doughnut seller, with 6,800 U.S. locations, enticed investors with plans to more than double its U.S. store count in 20 years after outpacing McDonald's Corp.'s revenue growth last year. Recently, the Canton, Massachusetts-based chain has sought to draw customers in the afternoon with snack foods including pepperoni-stuffed breadsticks.

In the U.S., where most of its stores are in New England and New York, Dunkin' plans to open as many as 250 new locations per year in 2011 and 2012, with a goal of 15,000. The chain has about 9,800 global locations. Dunkin' also franchises about 6,500 Baskin-Robbins ice cream shops globally, its filing showed.

The company was founded when Bill Rosenberg opened his first restaurant in the 1940s, which was later renamed Dunkin' Donuts. Revenue at Dunkin' last year jumped 7.3 percent, compared with 5.8 percent at McDonald's, the world's biggest restaurant chain, which serves the McCafe line of coffees.
JPMorgan Chase & Co., Barclays Plc, Morgan Stanley, Bank of America Corp. and Goldman Sachs Group Inc. led the Dunkin' offering. Underwriters have an option to buy an additional 3.3 million shares within 30 days.

More details are available in the company’s IPO prospectus.

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