The Zacks Analyst Blog Highlights: Kohlberg Kravis Roberts, Barclays, Morgan Stanley, Credit Suisse Group and Dunkin' Brands Group
CHICAGO, Nov. 13, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Kohlberg Kravis Roberts & Co. L.P. (NYSE:KKR-Free Report), Barclays PLC (NYSE:BCS-Free Report), Morgan Stanley (NYSE:MS-Free Report), Credit Suisse Group AG (NYSE:CS-Free Report) and Dunkin' Brands Group, Inc. (Nasdaq:DNKN-Free Report).
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Here are highlights from Tuesday's Analyst Blog:
KKR Inks Deal to Buy Brickman Group
In line with its acquisition strategy, private equity firm Kohlberg Kravis Roberts & Co. L.P. (NYSE:KKR-Free Report) announced a deal to acquire The Brickman Group. Ltd. LLC for $1.6 billion from Leonard Green & Partners, L.P. and other shareholders. Leonard Green & Partners, a Los Angeles-based private-equity firm, acquired a majority stake in Brickman in 2006.
Brickman, founded in 1939, is one of the largest landscape maintenance and snow removal services firms in the U.S. It caters to a diverse portfolio of 10,000 clients with around 10,000 employees all over the country.
The purchase is made through KKR North American Fund XI and other funds and accounts run by Kohlberg Kravis. The deal is expected to close by the end of 2013, subject to the fulfillment of customary closing conditions.
For Brickman, Barclays Capital Inc. an arm of Barclays PLC (NYSE:BCS-Free Report), and Morgan Stanley and Co. LLC, part of Morgan Stanley (NYSE:MS-Free Report), acted as the financial advisors, while Latham & Watkins LLP and Dechert acted as legal advisors. For Kohlberg Kravis, Credit Suisse Securities (USA) LLC, part of Credit Suisse Group AG (NYSE:CS-Free Report) acted as the financial advisor, while Simpson Thacher & Bartlett was the legal advisor.
As the economy is gradually reviving from the financial crisis, the construction sector is rebounding, driving private equity firms to invest in the sector. On Oct 2013, Clayton Dubilier & Rice LLC announced its decision to acquire a majority stake in Deere & Co.'s landscaping business for $465 million.
Kohlberg Kravis has marked its presence in 25 industries across the U.S., ranging from software to healthcare. In Aug 2013, the company announced an agreement to purchase clinical research firm, ReSearch Pharmaceutical Services Inc (RPS) from NY-based global private equity firm, Warburg Pincus. Further, in Oct 2013, the company proposed to acquire 10% stake in Qingdao Haier Co., Ltd. that specializes in home appliances and is a leader in the Chinese market for the same.
Kohlberg Kravis currently carries a Zacks Rank #1 (Strong Buy).
Baskin-Robbins to Expand in LA
Baskin-Robbins, the well-known brand of Dunkin' Brands Group, Inc. (Nasdaq:DNKN-Free Report), is set to expand its presence in the flourishing California market. In this regard, Baskin-Robbins penned three multi-store development deals with existing franchisees for opening four restaurants in Los Angeles, California.
The restaurateur has signed the first deal with its longtime partner – Binoy Kothari – to unveil two Baskin-Robbins outlets in Orange County. The upcoming outlets will add to the five Baskin-Robbins locations already operated by Kothari. Apart from this, Baskin-Robbins signed other two agreements with franchisees – Andy Chesler and Farid Ahmed – for opening a unit each in San Fernando Valley and Chino Hills in Greater Los Angeles. The franchisees' proven track record and superior knowledge of the local markets helped clinch the deals.
The company is also hiring new franchise partners to open Baskin-Robbins units in California. In this regard, Dunkin' has decided to provide several incentives like lower royalty fees and 10-year franchise fee payment plan.
We believe, the latest alliances reflect Dunkin' Brands' intent to make California one of the prime states for expansion considering its potential to generate about $67.4 billion in restaurant sales in 2013, per the National Restaurant Association. Further, expanding in an existing market will provide the company with support infrastructure and an improved distribution model which, in turn, is expected to facilitate supply chain management.
Last month, this Zacks Rank #3 (Hold) company partnered with three new and existing franchisees to launch a total of 27 Dunkin' Donuts as well as Dunkin' Donuts/Baskin-Robbins combo restaurants in South California in the coming years. As a point of reference, the openings are in line with Dunkin' Brands' goal to double its presence in the U.S. over the next 20 years.
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