Bain OKs Deal for Dunkin’ Brands

Bain Capital and two investment firms agreed Monday to buy Pernod Ricard’s restaurant business in the U.S. for $2.43 billion, taking control of Dunkin’ Donuts, the largest doughnut chain in the country.

Bain is teaming up with Carlyle Group and Thomas H. Lee Partners to buy Canton, Mass.-based Dunkin’ Brands Inc., the companies said. Pernod had expected about $2 billion for the unit, which also runs the Baskin-Robbins and Togo’s chains.

The buyout firms will continue Dunkin’ Brands’ expansion beyond its stronghold in the Northeast.

Operating income rose 36% in the fiscal first half ended Feb. 28, when it was still a subsidiary of Allied Domecq, as the company added stores and new products such as lattes at Dunkin’ Donuts to compete against Starbucks Corp.

“There are a number of geographic markets in the U.S. that don’t have the Dunkin’ franchise,” said Tom Burnett, president of Merger Insight, a unit of New York-based brokerage Wall Street Access. “There are various pockets and geographic regions that could be used for expansion and exploitation.”

Pernod, the world’s second-largest liquor company, got Dunkin’ Brands in its $13.4-billion purchase of Allied Domecq in July. It wanted to sell the company to pay down debt and focus on its spirits business, whose brands include Chivas Regal, Wild Turkey and Kahlua.

Dunkin’ Brands is adding locations that combine Dunkin’ Donuts and Baskin-Robbins stores to drive growth. Dunkin’ Donuts sells 4 million doughnuts and 2.7 million cups of coffee daily, according to its website.