Sweet on each other: Krispy Kreme owner buys Panera
JAB investment firm taking eatery private in $ 7 billion deal
The owner of a chain known for making a guilty pleasure, sugary Krispy Kreme doughnuts, is buying another that has built its reputation around healthy eating, Panera Bread.
JAB, the investment firm that controls the Krispy Kreme chain and coffee brands Keurig, Peet’s and Caribou, announced the $ 7 billion deal Wednesday to acquire Panera and turn it into a private company. Though known for its sandwiches, Panera is a major seller of coffee.
Panera’s ascension as one of the most successful fast- casual chains shook up the restaurant industry. It has introduced higher- quality ingredients than fast- food competitors, made Wi- Fi widely available and given customers healthy options. The company stayed ahead of the technological curve by introducing digital ordering earlier than many competitors.
JAB gave few details about its plans for Panera, which has more than 2,000 locations and about $ 5 billion in annual sales.
But JAB spokesman Tom Johnson said customers shouldn’t expect to see other brands owned by the Luxembourg- based investment firm pop up in Panera. “JAB’s investment philosophy with companies it acquires is they operate independently and continue to be managed by their management,” he said. “There’s no plan to integrate with other assets.”
The investment firm plans to maintain Panera’s current executive leadership, including CEO and founder Ron Shaich.
“We strongly support Panera’s vision for the future, strategic initiatives, culture of innovation and balanced company vs. franchise store mix,” JAB partner and CEO Olivier Goudet said in a statement. “We are excited to invest in and work together with the company’s management team and franchisees to continue to lead the industry.”
JAB will pay $ 315 per share and assume $ 340 million in debt. Panera shares jumped 14.2% to close at $ 312.94 on Wednesday.
Bob Derrington, managing director and senior research analyst at the Telsey Advisory group, said Panera’s strong digital platform makes it attractive to JAB. Online ordering now accounts for about 24% of sales at company- owned locations.
“It’s a great fit,” Derrington said. “The technology piece that Panera essentially brings to them is the crown jewel that really benefits the business.”