Dunkin' Donuts IPO Bound: Reports
"Dunkin's name is going to have quite a bit of attraction," Menlow said. "It's obviously very ubiquitous. But it's going to come down to how much debt this company has and what their ability will be to service it and pay it down.''
Jim Coen, president of Dunkin' Donuts Independent Franchise Owners, told the Web site he hopes funds raised through an IPO "will go back into the brand,'' adding that "going public will add transparency. But it will also drive the need for quarterly growth. And that's a concern to franchise owners who have been growing their businesses for over 50 years.''
The deal to take Crumbs public through a merger with special-purpose acquisition firm 57th Street General Acquisition values the cupcake chain at $66 million. A publicly traded Crumbs "will be a growth play" for investors, Michael A. Yoshikami, president and chief investment strategist at YCMNET Advisors, told TheStreet in January. He expects investor interest to be strong since Crumbs would represent one of the only ways to bet on the cupcake trend through an exchange-traded equity. Krispy Kreme Doughnuts (KKD), competitor to Dunkin' Donuts and Crumbs, saw its shares plunge more than 20% on Friday after the company disappointed investors with a quarterly loss as rising commodity costs ate into its bottom line, and said it would raise prices.
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