The investment company that recently expanded its coffee holdings by buying Keurig, the single-cup coffee machine maker, announced today (May 9) that it is grabbing some donuts to go with that.
Luxembourg-based JAB Holdings is adding Krispy Kreme, the North Carolina-based donut company, to its breakfast-oriented pantry of products.
The company also has stakes in Douwe Egberts, the company behind Gevalia, Tassio and other brands, Keurig Green Mountain, Peet’s Coffee & Tea, and Caribou Coffee, the New York Daily News reported. It also is financially involved in bagel shop operator Einstein Noah, beauty products make Coty and Jimmy Choo, a high-end shoe seller.
News of the Krispy Kreme takeover, which is worth roughly $1.35 billion, sent that company’s share price up 24% on Monday morning.
In addition to owning more than 1,100 donut shops around the world – 300 or so of them in the U.S. – Krispy Kreme does some business through supermarkets and convenience stores. It also participates in fund-raising activities with the likes of the Boy Scouts and various charitable organizations.
Nothing has been said about if or how the JAB takeover will affect Krispy Kreme’s previously announced plan to open 120-140 international locations and roughly 30 sites in the U.S. in its 2017 fiscal year, but the announcement of the deal declared that Krispy Kreme would continue to operate independently from its Winston-Salem headquarters location. The company has also said that it wants to grow its beverage sales, which now are the equivalent of a puddle compared to its mountain of donuts-only sales.
The Daily News quoted Peter Harf, a senior partner at JAB, as saying the acquisition is part of his firm’s strategy of investing in brands with significant growth prospects.
JAB Beech Inc. will pay $21 for each share of Krispy Kreme Doughnuts Inc. That’s about a 25 percent premium to the company’s Friday closing price of $16.86.
Krispy Kreme’s board unanimously approved the transaction, which is targeted to close in the third quarter. The company said it will postpone its annual share-holders meeting, which was originally set for June 14.
Its shares climbed $4.11, or 24.4 percent, to $20.97 in morning trading. Its shares are up 20 percent so far this year, The News said.