Bain Capital, the Carlyle Group and THL Partners bought Dunkin' Brands, the owner of Dunkin' Donuts and Baskin Robbins for $2.5 billion from French wine and spirits giant Pernod Ricard in 2005. In July 2011, the private equity owners priced an initial public offering at $19 a share, giving the company a market value of $2.4 billion, however, shares spiked 47% in Dunkin' Brands debut on the Nasdaq, closing at $27.85.In the ubiquitous coffee seller's debut share offering, the equity capital raised was used to help lower the company's debt. However, seven years after the buyout, private equity investors are now looking to realize parts of their investment. Earlier in March, Dunkin' Brands said that it's private equity backers would look to sell as much as 25 million shares in a secondary offering, causing shares to fall from levels near 2012 highs. Rising earnings and profitability on pricing power and increased demand for Dunkin' Brands coffee and specialty drinks products may be hampered by the prospect of continued private equity investor share sales. Meanwhile, the company's near 25% year-to-date share gain puts Dunkin' Brands at prices with little upside to analyst expectations. Overall, Dunkin' Brands is expected to see its revenue and profitability grow to $663 million and $132 million respectively, according to analysts polled by Bloomberg who give the company a $31.88 a share price target. Bain Capital and the Carlyle Group both hold over 18.44% stakes in Dunkin' Brands, or roughly 22 million shares each, according to SEC filings compiled by Bloomberg. THL Partners holds a slightly smaller 18.15% share stake on just under 22 million shares, putting total private equity holdings in the national coffee seller at over 55%.
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