A glass of Pernod with your doughnut?
Combining a liquor company with a fast-food company under one management has always seemed like a bad idea to us. But that's what Allied Domecq did for years, mixing their premium liquor brands with such all-American franchises as the Dunkin' Donuts coffee and donut chain, the Baskin-Robbins ice cream franchise, and the Togo sandwich shop chain.
Granted, these fast food companies are profitable, and Dunkin' Donuts especially has remade its image over the past few years so that it can compete with overpriced coffee maker Starbucks on one hand and ailing Krispy Kreme donut shops on the other. Same store growth for the company was over 8% last year. But these business model for fast food, as Pepsico realized with Pizza Hut and Kentucky Fried Chicken, is so different from selling products through retail chains that there was no advantage at all to combining them.
Pernod Ricard's management must have thought so too. They just announced that they will sell the business to a combination of equity groups in a $2.4 billion deal. Those chains were picked up when Pernod bought out rival Allied Domecq earlier this year.
Dunkin' Donuts is ready for expansion beyond its US East Coast base, including an international move. Baskin-Robbins already has international presence.
The buyers are Bain Capital, the Carlyle Group, and Thomas H. Lee. B Bain Capital is already a major investor in other fast-food chains, including Burger King and Domino's Pizza. Those companies, combined with the Pernod acquisitions, would make a great IPO, a worthy competitor to fast-food spinoff Yum! Brands.
For Pernod, it's a lot more money to invest in the alcohol business, particularly in wine, the hottest area for consolidation.
10:02:05 PM 
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