Krispy Kreme (KKD) will be acquired by JAB Beech, a subsidiary of investment firm JAB Holdings Company, in a deal valued at $1.35 billion. JAB Beech will pay $21 a share in cash for Krispy Kreme, a 25% premium over the company's Friday closing stock price of $16.86. The company's more than 1,100 stores across the world will continue to be operated independently.
The deal will turn Krispy Kreme into a private company and is expected to close in the third quarter this year. Krispy Kreme went public in April 2000, and as the once-small company gained prominence, its stock reached a high of $49.37 in August 2003. It more recently plummeted to as low as $1.08 a share in February 2009. Shares have fallen roughly 2.4% in the past year.
Krispy Kreme's business has been fairly strong in recent years, with the fourth quarter of 2015 marking its seventh consecutive quarter of same-store sales growth at company-owned stores in the U.S. The majority of Krispy Kreme stores are operated by franchisees, where same-store sales also grew in the quarter ended Jan. 31.
The latest acquisition by JAB shows how much the firm has been targeting major breakfast and coffee brands at a time when breakfast is one of the few growth engines of the restaurant industry. JAB acquired Keurig Green Mountain in a $13.9 billion deal last year and has controlling stakes in other coffee companies including Peet's Coffee & Tea and Caribou Coffee.
JAB, backed by Austria’s billionaire Reimann family, also has invested in a variety of consumer-goods companies, such as cosmetics giant Coty Inc. and Durex condom maker Reckitt Benckiser Group Plc. Four of the Reimanns each have a net worth of about $2.9 billion, according to the Bloomberg Billionaires Index.
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