NEW YORK – Krispy Kreme Doughnuts (NYSE: KKD) stock jumped 24.3 percent after JAB Beech announced on Monday it is taking the North Carolina chain private in a deal worth $1.35 billion, or $21 a share. JAB Beech, based in Luxembourg, also owns Keurig Green Mountain, Peet’s Coffee & Tea and Caribou Coffee.
The deal, expected to close in the third quarter, was approved by shareholders and the firm said it will postpone its annual shareholder’s meeting, initially set for June 14. The company’s shares rose $4.11 or 24.4 percent, to $20.97 in Monday morning trading.
Associated Press reported Krispy Kreme will still be independently operated from Winston-Salem, North Carolina. Founded in 1937, the firm has more than 1,100 shops worldwide and 300 of those operate in the United States.
“We are thrilled to have such an iconic brand as Krispy Kreme joining the JAB portfolio,” said Peter Harf, senior partner at JAB, in a statement, as reported by The New York Times. “This is yet another example of our commitment to investing in extraordinary brands with significant growth prospects.”
Harf told AP that the firm’s strategy is to invest in brands with significant growth prospects, which is why shareholders decided to acquire Krispy Kreme.
JAB also has stakes in other brands such as Jacobs Douwe Egberts and Tassio. Putting its coffee empire aside, it has stakes in shoe seller Jimmy Choo, the beauty products maker Coty and bagel shop operator Einstein Noah.
Expansion plans and advisers
Krispy Kreme said in March that it had plans to open about 30 new locations in the U.S. and up to 140 new international shops for its fiscal 2017. Krispy Kreme domestic stores get most of its gains from doughnuts and other pastries, compared to its rival Dunkin’ Donuts which gets most of its business from coffee drinks and sandwiches. However, Krispy Kreme has said it wants to boost its beverage sales.
Barclays and BDT & Company provided financial advice to JAB, while Skadden, Arps, Slate and Meagher & Flom were the legal advisers to JAB. For its part, Krispy Kreme was financially advised by Wells Fargo and its legal advisers were Simpson Thacher & Bartlett and Womble Carlyle Sandridge & Rice.
Source: New York Times