Dunkin’ Sale Poised to Be Second-Largest Restaurant Deal Ever

(Bloomberg) -- Inspire Brands Inc. hasn’t been around for long, but it’s already making its mark on the restaurant industry.

Adding to a string of acquisitions, the private equity-backed company is poised to sign the sector’s second-largest deal ever as it plans a blockbuster takeover of Dunkin’ Brands Group Inc. The potential purchase could be valued at almost $12 billion including debt, trailing only the $12.1 billion merger of Burger King and Tim Hortons in 2014, according to data compiled by Bloomberg.

The megadeal would dramatically expand Inspire, which was formed through the 2018 merger of Arby’s and Buffalo Wild Wings. It has since acquired brands including Sonic Corp. and Jimmy John’s, giving it more domestic restaurant locations than industry stalwarts such as Wendy’s Co.

Inspire, co-founded by Paul Brown of Arby’s and Neal Aronson, who started private equity firm Roark Capital Group, is known for taking an active role with its portfolio companies, pushing changes such as new menu items to reinvigorate sales. Dunkin’, which has outpaced rivals during the pandemic in part through investments in digital operations, would give Inspire its first brand focused on coffee and breakfast. Shares of Canton, Massachusetts-based Dunkin’ are up 35% this year, giving it a market valuation of $8.4 billion.

Roark, started in 2001, also owns franchised chains outside of the Inspire portfolio, including Auntie Anne’s and Cinnabon. Dunkin’ wouldn’t be its first restaurant investment during the pandemic, after affiliates of the Atlanta-based firm put $200 million into Cheesecake Factory in April.

Talks between Inspire and Dunkin’ are ongoing and an agreement could be announced as soon as Tuesday, though the timing could change, according to a person familiar with the matter who asked not to be identified discussing private information. Dunkin’ on Sunday confirmed the negotiations following a New York Times report that said an offer could value the shares at $8.8 billion.

©2020 Bloomberg L.P.