Lynda Kiernan
JAB Holding Co., the investment arm of the Reimann family, and its partner, minority investor BDT Capital Partners, acquired the iconic Krispy Kreme Doughnuts for $1.35 billion. The purchase price translates to $21 per share or 25% above Krispy Kreme’s closing price on May 6.
JAB subsidiary, JAB Beech, will add Krispy Kreme to its portfolio that is already heavy with breakfast food and beverage brands including Peet’s Coffee & Tea, Caribou Coffee, Einstein Brothers Bagels, Stumptown Coffee Roasters, and Keurig Green Mountain, which JAB acquired in December for $13.9 billion.
Krispy Kreme, which has been in business for nearly 80 years, saw a setback last year when its stock fell below $14 as the company reported it missed its sales and earnings targets due to the failure of its consumer packaged goods unit that sells its branded products in supermarkets. However, over the past year, the company’s shares rebounded reaching $20.88 on May 9 in New York.
“This is yet another example of our commitment to investing in extraordinary brands with significant growth prospects,” said Peter Harf, Senior Partner at JAB in a firm statement. “We feel strongly that Krispy Kreme will benefit greatly from our long-term focus and support for management’s vision in building on the legacy of this exciting brand as an independent standalone entity.”
The deal is not subject to any financing conditions and is expected to close in the third quarter of this year. Upon closing, Krispy Kreme will become privately owned and will continue to be run from its current headquarters located in Winston-Salem, North Carolina.
Breakfast offerings have garnered particular attention as they prove to be a profitable addition for investors and companies. The New York Times reports that chains including Wendy’s and Taco Bell have made moves to expand their offerings to include breakfast-geared foods, and McDonald’s shift to offering all-day breakfast foods has resulted in that company seeing a 35% increase in its first-quarter profits.