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Panera to be acquired for $7.5B

panera bread exterior

Panera Bread Co. has agreed to be acquired by the parent of Krispy Kreme and Caribou Coffee in a deal valued at $7.5 billion, one of the highest prices ever paid for a restaurant company.

The deal, announced after two days of speculation over what company would have the wherewithal to buy the high-flying bakery-cafe chain, transforms buyer JAB Holding Co. into a global restaurant powerhouse. 

Backed by Austria’s multibillionaire Reimann family, JAB has acquired a number of smaller operations, nearly all of which compete in the bakery or coffee markets. Those previous additions to the fold include the Einstein Bros. and Noah’s Bagels chains, and the Peet’s Coffee & Tea and Stumptown coffee businesses.

It acquired Krispy Kreme in May 2016 for $1.35 billion, which is 19 times the doughnut chain’s earnings before interest, taxes, depreciation and amortization, or EBITDA.

JAB agreed to pay Panera stockholders $315 per share in cash to take Panera private. The deal also calls for the buyer to assume $340 million in debt.

Panera CEO Ron Shaich and “parties affiliated with him” have agreed to tender their 15.5% of the company’s outstanding shares to JAB. Panera’s board has also approved the deal.

“We believe this transaction with JAB offers the best way to continue to operate” with shareholders, employees and franchisees in mind, Shaich said in a prepared statement.

JAB indicated that Panera’s management will remain in place.

The deal is expected to close during the third quarter of 2017.

Simultaneous with announcing the deal, Panera revealed that same-store sales for the first quarter rose 5.3%.
 

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