NYPost reported:
Dunkin’ Brands may take on more debt to buy back shares from its private-equity backers, including Bain Capital.
“The
most likely use of cash would be a share repurchase, not a public
float,” Dunkin’ CFO Neil Moses said yesterday said at a Morgan Stanley
investor conference. “It might take the form of a share repurchase from
our private-equity owners.”
Moses said the buyback would increase
the company’s debt to more than five times earnings before interest,
taxes, depreciation and amortization, or Ebidta, up from 4.2 times now.
By that calculation, the company would be taking on somewhere in the range of $200 million to $350 million in additional debt.
Dunkin’s PE owners — Bain, Carlyle Group and THL Partners — took the
company public less than a year ago. Six of Dunkin’s 10 directors are
from the PE firms.
Control the board, control the money flow. This is how private equity underwriters keep the cash spigot going, even for publicly traded firms.
Shareholders exist to enrich the PEU boys. New Carlyle Group
unit holders are down 10% in a few short weeks. Carlyle dunked IPO profits at unit holders' expense.
