Form SC TO-C DUNKIN' BRANDS GROUP, Filed by: Vale Merger Sub, Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
Dunkin’ Brands Group, Inc.
(Name of Subject Company)
Vale Merger Sub, Inc.
(Offeror)
Inspire Brands, Inc.
(Parent of Offeror)
(Names of Filing Persons)
Common stock, par value $0.001 per share
(Title of Class of Securities)
265504100
(CUSIP Number of Class of Securities)
Nils H. Okeson
Chief Administrative Officer, General Counsel and Secretary
Three Glenlake Parkway
Atlanta, GA 30328
(678) 514-4100
(Name, address and telephone number of person authorized to receive notices and communications on behalf of filing persons)
With a copy to:
Jeffrey D. Marell, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
(212) 373-3000
CALCULATION OF FILING FEE
| Transaction valuation* | Amount of filing fee* | |
| Not applicable | Not applicable | |
| * | A filing fee is not required in connection with this filing as it relates solely to preliminary communications made before the commencement of a tender offer. |
| ☐ | Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
| Amount Previously Paid: Not applicable | Filing Party: Not applicable | |
| Form or Registration No: Not applicable | Date Filed: Not applicable |
| ☒ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
| ☒ | third-party tender offer subject to Rule 14d-1. |
| ☐ | issuer tender offer subject to Rule 13e-4. |
| ☐ | going-private transaction subject to Rule 13e-3. |
| ☐ | amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment reporting the results of the tender offer: ☐
If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:
| ☐ | Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
| ☐ | Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) |
This Tender Offer Statement on Schedule TO relates solely to preliminary communications made before the commencement of a planned tender offer by Vale Merger Sub, Inc. (“Purchaser”), a Delaware corporation and wholly-owned indirect subsidiary of Inspire Brands, Inc. (“Parent”), a Delaware corporation, for any and all of the outstanding shares of common stock, par value $0.001 per share, of Dunkin’ Brands Group, Inc. (the “Company”), to be commenced pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of October 30, 2020, among Parent, Purchaser and the Company.
Notice to Investors
The proposed tender offer described above has not yet commenced. This communication is for informational purposes only and is not a recommendation, an offer to purchase or a solicitation of an offer to sell shares of Company stock. At the time the tender offer is commenced, Purchaser will file a tender offer statement and related exhibits with the U.S. Securities and Exchange Commission (the “SEC”) and the Company will file a solicitation/recommendation statement with respect to the tender offer. Investors and stockholders of the Company are strongly advised to read the tender offer statement (including the related exhibits) and the solicitation/recommendation statement, as they may be amended from time to time, when they become available, because they will contain important information that stockholders should consider before making any decision regarding tendering their shares. The tender offer statement (including the related exhibits) and the solicitation/recommendation statement will be available at no charge on the SEC’s website at www.sec.gov. In addition, the tender offer statement and other documents that Purchaser files with the SEC will be made available to all stockholders of the Company free of charge from the information agent for the tender offer. The solicitation/recommendation statement and the other documents filed by the Company with the SEC will be made available to all stockholders of the Company free of charge at https://investor.dunkinbrands.com/investor-relations.
Forward-Looking Statements
Certain forward-looking statements made in this communication, including any statements as to future results of operations and financial projections, may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements may be identified by the use of words such as “expect,” “intend,” “anticipate,” “believe,” “estimate,” “potential,” “should” or similar words and include, among other things, statements about the potential benefits of the proposed transaction, the prospective performance and outlook of the surviving company’s business, performance and opportunities, the ability of the parties to complete the proposed transaction and the expected timing of completion of the proposed transaction. Forward-looking statements are based on management’s current expectations and beliefs, as well as a number of assumptions, estimates and projections concerning future events and do not constitute guarantees of future performance. These statements are subject to risks, uncertainties, changes in circumstances, assumptions and other important factors, many of which are outside management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. In particular, some of the factors that could cause actual future results to differ materially from those expressed in any forward-looking statements include, among others: (i) uncertainties as to the timing and expected financing of the tender offer; (ii) the risk that the proposed transaction may not be completed in a timely manner or at all; (iii) the possibility that competing offers or acquisition proposals for the Company will be made; (iv) uncertainty surrounding how many of the Company’s stockholders will tender their shares in the tender offer; (v) the possibility that any or all of the various conditions to the consummation of the tender offer may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities; (vi) the possibility of business disruptions due to transaction-related uncertainty; (vii) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; (viii) the risk that stockholder litigation in connection with the proposed transaction may result in significant costs of defense, indemnification and liability; (ix) Parent’s ability to realize the synergies contemplated by the proposed transaction and integrate the business of the Company; (x) Parent’s level of leverage and debt, including covenants that restrict the operation of its business; (xi) Parent’s ability to service outstanding debt or obtain additional financing; and (xii) other factors as set forth from time to time in the Company’s filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, as well as the tender offer statement, solicitation/recommendation statement and other tender offer documents that will be filed by Parent, Purchaser and the Company, as applicable. Therefore, you should not place undue reliance on such forward-looking statements. All forward-looking statements are based on information available to management on the date of this communication, and we assume no obligation to, and expressly disclaim any obligation to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
| Item 12. | Exhibits. |
Exhibit (a)(5)(B)
TO ACQUIRE OCTOBER 30, 2020 A DIFFERENT KIND OF RESTAURANT COMPANY Inspire is focused on bringing together a family of complementary, highly differentiated brands The company’s platform is designed to enable each brand to benefit from and build off the strengths of one another Inspire takes the long-term view — investing in shared services and key capabilities that will create competitive advantage for its brands DUNKIN’ AND BASKIN-ROBBINS ARE AN IDEAL FIT FOR THE INSPIRE PORTFOLIO Iconic, category-leading brands with broad consumer appeal Adds unique and complementary guest occasions to Inspire’s current family Brings new capabilities and resources to Inspire, including a scaled international platform and robust consumer packaged goods licensing infrastructure DUNKIN’ BRANDS TO BENEFIT FROM INSPIRE’S MISSION TO INVIGORATE BRANDS AND SUPERCHARGE LONG-TERM GROWTH Shared Services Model: Inspire’s model will enable Dunkin’ and Baskin-Robbins to learn from and build on the strengths of the other brands Innovation & Growth: Both brands can leverage Inspire’s capabilities in areas like data & analytics and media buying to fuel future growth TRANSACTION DETAILS $106.50 per share in cash 20% premium to Dunkin’ Brands closing stock price on October 23 Valued at $11.3 billion including assumption of Dunkin’ Brands debt Expected to close by end of 2020 30% premium to Dunkin’ Brands 30-day volume-weighted average price Following completion of the transaction, Dunkin’ and Baskin-Robbins will be operated as distinct brands within Inspire PRO FORMA INSPIRE PROFILE AT TRANSACTION COMPLETION $26B In Annual Systemwide Sales 31,600 Restaurants Worldwide in 60+ Countries 600,000 Company and Franchise Team Members 25M+ Loyalty Members 3,200+ Franchisees TM & 2020 Inspire Brands, Inc. All rights reserved.
IMPORTANT INFORMATION The tender offer for the outstanding shares of Dunkin’ Brands common stock has not yet commenced. This communication is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares of Dunkin’ Brands common stock. The solicitation and offer to buy shares of Dunkin’ Brands common stock will only be made pursuant to the tender offer materials that Inspire intends to file with the U.S. Securities and Exchange Commission (the “SEC”). At the time the tender offer is commenced, Inspire will file a tender offer statement on Schedule TO with the SEC, and Dunkin’ Brands will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the tender offer. DUNKIN’ BRANDS’ STOCKHOLDERS ARE ADVISED TO READ THE SCHEDULE TO (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS) AND THE SCHEDULE 14D-9, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BEFORE THEY MAKE ANY DECISION WITH RESPECT TO THE TENDER OFFER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES THERETO. Both the tender offer statement and the solicitation/recommendation statement will be mailed to Dunkin’ Brands’ stockholders free of charge. Investors and stockholders may obtain free copies of the Schedule TO and Schedule 14D-9, as each may be amended or supplemented from time to time, and other documents filed by the parties (when available) at the SEC’s web site at www.sec.gov, by contacting Dunkin’ Brands Investor Relations either by telephone at 781-737-3200 or by e-mail at [email protected] or on Dunkin’ Brands’ website at www.dunkinbrands.com. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This release contains forward-looking statements and projections within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Generally, these statements may be identified by the use of words such as “expect,” “intend,” “anticipate,” “believe,” “estimate,” “potential,” “should” or similar words and include, among other things, statements about the potential benefits of the proposed transaction, the prospective performance and outlook of the surviving company’s business, performance and opportunities, the ability of the parties to complete the proposed transaction and the expected timing of completion of the proposed transaction. Forward-looking statements are based on management’s current expectations and beliefs, as well as a number of assumptions, estimates and projections concerning future events and do not constitute guarantees of future performance. These statements are subject to risks, uncertainties, changes in circumstances, assumptions and other important factors, many of which are outside management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. In particular, some of the factors that could cause actual future results to differ materially from those expressed in any forward-looking statements include, among others: (i) uncertainties as to the timing and expected nancing of the tender offer; (ii) the risk that the proposed transaction may not be completed in a timely manner or at all; (iii) the possibility that competing offers or acquisition proposals for the Dunkin’ Brands will be made; (iv) uncertainty surrounding how many of Dunkin’ Brands’ stockholders will tender their shares in the tender offer; (v) the possibility that any or all of the various conditions to the consummation of the tender offer may not be satised or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities; (vi) the possibility of business disruptions due to transaction-related uncertainty; (vii) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; (viii) the risk that stockholder litigation in connection with the proposed transaction may result in significant costs of defense, indemnification and liability; (ix) Inspire’s ability to realize the synergies contemplated by the proposed transaction and integrate the business of the company; (x) Inspire’s level of leverage and debt, including covenants that restrict the operation of its business; (xi) Inspire’s ability to service outstanding debt or obtain additional financing; and (xii) other factors as set forth from time to time in Dunkin’ Brands’ filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, as well as the tender offer statement, solicitation/ recommendation statement and other tender offer documents that will be led by Inspire and Dunkin’ Brands, as applicable. Therefore, you should not place undue reliance on such forward-looking statements. All forward-looking statements are based on information available to management on the date of this communication, and we assume no obligation to, and expressly disclaim any obligation to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. undue reliance on these forward-looking statements, which speak only as of the date hereof.
Exhibit (a)(5)(C)
Letter from Paul Brown to Inspire Brands Employees announcing the definitive merger agreement
From: Paul Brown, Chief Executive Officer of Inspire Brands
Dear Inspire Brands Team Members,
I’m excited to announce that we entered into an agreement to acquire Dunkin’ Brands, parent company of Dunkin’ and Baskin-Robbins. You can read this morning’s press release [embedded hyperlink], as well as a fact sheet on the transaction [embedded hyperlink].
Dunkin’ is famous for its combination of high-quality coffees, espresso beverages, baked goods, and breakfast sandwiches served all day with fast, friendly service. Baskin-Robbins, one of the world’s largest chain of ice cream specialty shops, is known for its variety of “31 flavors” of ice cream, along with their creative ice cream cakes, milkshakes, and ice cream sundaes. Currently there are more than 12,600 Dunkin’ and more than 7,800 Baskin-Robbins locations around the world.
This transaction furthers Inspire’s goal of bringing together a family of highly differentiated and complementary brands. Both Dunkin’ and Baskin-Robbins will benefit by leveraging the capabilities and best practices of Inspire’s shared services platform. Additionally, Dunkin’ will benefit Inspire by adding a scaled international platform and a robust consumer packaged goods licensing infrastructure.
Dunkin’ and Baskin-Robbins are category leaders with more than 70 years of rich heritage, and together they are two of the most iconic restaurant brands in the world. Following the completion of the transaction, Inspire will represent: $26 billion in systemwide sales; 31,600+ restaurants in 60+ countries; 600,000 company and franchise team members; 3,200+ franchisees; and more than 25 million loyalty members. By joining Inspire, these brands will add different and complementary guest occasions to our current portfolio. We are excited to welcome Dunkin’ and Baskin-Robbins’ team members, franchisees, and suppliers to the Inspire family.
I know you are excited to welcome Dunkin’ Brand’s employees, franchisees, and suppliers to the Inspire family. It’s important to remember that we will remain separate companies until the transaction has closed. We can work together to make preparations in advance of closing and we have a well-defined process on how that will be done. Please do not reach out to anyone at Dunkin’ Brands unless you are engaged by a member of the transition team.
Most importantly, we must continue to deliver consistent, strong results for our current brands. I continue to be so impressed and grateful of your unwavering dedication and commitment to excellence. Because of your hard work, Inspire has continued to thrive and is able to grow further. We will keep you updated as we move toward successfully closing of this transaction by end of 2020.
As a reminder, we expect this announcement to garner significant media attention. Inspire’s Communications Policy makes clear that no team members are authorized to engage with the media unless cleared by Corporate Communications. If you receive an inquiry from the media, please forward it to Corporate Communications at [email protected].
Please join me this morning at 10 a.m. ET / 9 a.m. CT for a special all-team meeting to discuss this news and why we’re doing this now.
Sincerely,
Paul Brown
Chief Executive Officer
Inspire Brands
Important Information
The tender offer for the outstanding shares of Dunkin’ Brands common stock has not yet commenced. This communication is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares of Dunkin’ Brands common stock. The solicitation and offer to buy shares of Dunkin’ Brands common stock will only be made pursuant to the tender offer materials that Inspire intends to file with the U.S. Securities and Exchange Commission (the “SEC”). At the time the tender offer is commenced, Inspire will file a tender offer statement on Schedule TO with the SEC, and Dunkin’ Brands will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the tender offer. DUNKIN’ BRANDS’ STOCKHOLDERS ARE ADVISED TO READ THE SCHEDULE TO (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS) AND THE SCHEDULE 14D-9, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BEFORE THEY MAKE ANY DECISION WITH RESPECT TO THE TENDER OFFER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES THERETO. Both the tender offer statement and the solicitation/recommendation statement will be mailed to Dunkin’ Brands’ stockholders free of charge. Investors and stockholders may obtain free copies of the Schedule TO and Schedule 14D-9, as each may be amended or supplemented from time to time, and other documents filed by the parties (when available) at the SEC’s web site at www.sec.gov, by contacting Dunkin’ Brands Investor Relations either by telephone at 781-737-3200 or by e-mail at [email protected] or on Dunkin’ Brands’ website at www.dunkinbrands.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements and projections within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Generally, these statements may be identified by the use of words such as “expect,” “intend,” “anticipate,” “believe,” “estimate,” “potential,” “should” or similar words and include, among other things, statements about the potential benefits of the proposed transaction, the prospective performance and outlook of the surviving company’s business, performance and opportunities, the ability of the parties to complete the proposed transaction and the expected timing of completion of the proposed transaction. Forward-looking statements are based on management’s current expectations and beliefs, as well as a number of assumptions, estimates and projections concerning future events and do not constitute guarantees of future performance. These statements are subject to risks, uncertainties, changes in circumstances, assumptions and other important factors, many of which are outside management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. In particular, some of the factors that could cause actual future results to differ materially from those expressed in any forward-looking statements include, among others: (i) uncertainties as to the timing and expected financing of the tender offer; (ii) the risk that the proposed transaction may not be completed in a timely manner or at all; (iii) the possibility that competing offers or acquisition proposals for the Dunkin’ Brands will be made; (iv) uncertainty surrounding how many of Dunkin’ Brands’ stockholders will tender their shares in the tender offer; (v) the possibility that any or all of the various conditions to the consummation of the tender offer may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities; (vi) the possibility of business disruptions due to transaction-related uncertainty; (vii) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; (viii) the risk that stockholder litigation in connection with the proposed transaction may result in significant costs of defense, indemnification and liability; (ix) Inspire’s ability to realize the synergies contemplated by the proposed transaction and integrate the business of the company; (x) Inspire’s level of leverage and debt, including covenants that restrict the operation of its business; (xi) Inspire’s ability to service outstanding debt or obtain additional financing; and (xii) other factors as set forth from time to time in Dunkin’ Brands’ filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, as well as the tender offer statement, solicitation/recommendation statement and other tender offer documents that will be filed by Inspire and Dunkin’ Brands, as applicable. Therefore, you should not place undue reliance on such forward-looking statements. All forward-looking statements are based on information available to management on the date of this communication, and we assume no obligation to, and expressly disclaim any obligation to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
Exhibit (a)(5)(D)
The Wall Street Journal
October 30, 2020
Dunkin’ to Be Sold to Inspire Brands for $8.8 Billion
Arby’s owner would become one of the largest U.S. restaurant operators
By: Heather Haddon
Inspire Brands Inc. will buy Dunkin’ Brands Group Inc., DNKN - 1.37%, for $8.8 billion, the companies said, setting up one of the largest restaurant deals in years as some in the industry think beyond the coronavirus pandemic.
The deal is the second-largest acquisition of a North American restaurant chain in at least a decade at $11.3 billion including debt, behind the $13.3 billion deal for Tim Hortons by Restaurant Brands International Inc. in 2014, according to investment data provider Dealogic. Inspire, the owner of Arby’s and other chains that is backed by private-equity firm Roark Capital, said the deal will make it the second-largest U.S. restaurant chain by domestic sales after McDonald’s Corp. The deal is expected to close by the end of the year, the companies said on Friday.
Talks between the companies started before the pandemic, according to Inspire. The pandemic complicated negotiations, Inspire’s Chief Executive Paul Brown said, in part because it caused a steep drop in Dunkin’s core breakfast sales. Chains focused on breakfast sales have been hit hard by the end of daily commutes and school runs. Mr. Brown said that he believes consumers will get back to their old routines after the pandemic is over and that the chain’s drive-throughs were attractive. During the pandemic, chains with drive-throughs have benefited from being able to maintain that relatively low-contact avenue for sales.
Dunkin’ on Thursday reported a U.S. same-store sales increase of 1% in its quarter ended in September, and said that sales remained up in its current period. “There’s an opportunity for the right kind of brand doing the right thing to actually take advantage when those habits are rebuilt,” Mr. Brown said in an interview. Dunkin’ CEO Dave Hoffmann said in a statement that the deal will help the company’s franchisees continue to grow their businesses.
Inspire said its all-cash deal to take the owner of Dunkin’ coffee shops and Baskin-Robbins ice cream stores private would value it at $106.50 a share, a 20% premium to its closing price on Oct. 23, before the New York Times reported last weekend that the two companies were discussing a possible deal.
The price of $106.50 a share would give Dunkin’ a market valuation of $8.8 billion. The chain’s stock closed on Friday at $100, up 32% this year.
Dunkin’ would be Inspire’s fourth restaurant acquisition since 2018, when it was formed through the merger of Arby’s and Buffalo Wild Wings. Inspire bought burger chain Sonic for $2.3 billion including debt in late 2018, and Jimmy John’s Gourmet Sandwiches last year. It has more than 11,000 restaurants currently.
With Dunkin’, the combined company would have 32,000 restaurants, $27 billion in annual sales and 600,000 company and franchise employees. Canton, Mass.-based Dunkin’ also would significantly expand Inspire’s footprint internationally. More than 42% of Dunkin’s roughly 21,100 stores are outside the U.S.
Franchisees run all Dunkin’ stores, a common ownership model across Inspire and Roark investments. Atlanta-based Roark’s broader food-and-restaurant portfolio includes Auntie Anne’s pretzels, Moe’s Southwest Grill and Jamba juice shops.
Other restaurant chains that have sold during the pandemic were in distress. Casual-dining brands Krystal, Logan’s Roadhouse, Bar Louie and the U.S. division of Le Pain Quotidien were sold after filing for bankruptcy.
Dunkin’ previously went private with a $2.43 billion buyout in 2006. Its private-equity investors took the chain public again in 2011.
Mr. Hoffmann, a former McDonald’s executive, has added new stores, brewing equipment and menu items such as espresso and sandwiches with Beyond Meat Inc.’s plant-based sausage. Dunkin’ U.S. same-store sales rose 2.1% last year, the greatest annual increase since 2013.
Write to Heather Haddon at heather.haddon@wsj.com