Wall Street wakes up and smells the Dunkin’

Dunkin’ Brands and its owners got a welcomed jolt in their first day of trading, with shares rising 47 percent, to $27.85, on a tough day for equities.

Today, Dunkin’ will report second-quarter earnings, but a restaurant expert who follows the business said, “All but a few will see earnings as just noise.”

Dunkin’s pop bodes well for specialty tea retailer Teavana, which prices today.

“Teavana could have a great run,” IPO-

Scoop founder John Fitzgibbon said.

He explained that specialty retailers are hot, pointing out that women’s boutique Francesca’s Holdings went public last week and gained 63 percent its first day.

For private-equity firms Bain Capital, Carlyle and THL Partners, Dunkin’s success vindicates what some saw as their questionable decision to pay a rich 13.5 times Ebitda (earnings before interest, taxes, depreciation and amortization) multiple in 2006 for the chain.

Dunkin’ Brands — which includes the Dunkin’ Donuts coffee chain and Baskin-Robbins ice cream chain — after yesterday’s close, trades at a better than 14 times Ebitda multiple, based on its $287 million in Ebitda, according to the restaurant expert.

When one compares Dunkin’ to Starbucks on an Ebitda basis, they trade at similar multiples. However, Dunkin’ trades at about 55 times earnings, as it spends relatively little on development or opening company stores, while Starbucks trades at 27 times earnings.

The private-equity firms in November had Dunkin’ borrow $475 million to pay them a dividend, and the $400 million in proceeds from the IPO will be used to pay back most of that loan.

This was a good day too for the Dunkin’ franchisees that took advantage of the chance to buy 100 shares for each store they own at the offering price of $19. The average Dunkin’ franchisee owns five stores. [email protected]