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Financing

Krispy Kreme raises $500M in its IPO

The doughnut chain priced its offering at $17 per share, which was below its expected range.
Photograph: Shutterstock

Krispy Kreme raised $500 million in its initial public offering on Wednesday after the company priced its shares at $17, below the range the Charlotte-based company had initially expected.

Still, the price gives the company a market value of about $2.8 billion, more than double the company’s value when the European investment firm JAB Holdings took the company private back in 2016.

Krispy Kreme sold 29.4 million shares of stock to investors and the underwriters have the option to buy another 4.4 million shares. The company's stock rose more than 10% through late-morning trading on Thursday. 

The company plans to use funds from the offering to pay down debt. It initially expected to sell stock at between $21 and $24 per share, which would have raised about $600 million at its mid-range. The pricing suggests that there was less interest in the offering than expected, at least at those prices. 

Krispy Kreme will trade on the Nasdaq Stock Exchange under the ticker symbol DNUT.

Krispy Kreme operates 365 U.S. locations and more than 1,100 international units. It also owns the late-night cookie delivery concept Insomnia Cookies, which it acquired in 2018. Revenues at the chain increased 23% in the first quarter to $321.8 million. The increase came largely from Krispy Kreme buying out more units from franchisees—a strategy it is using to gain more control over its brand.

The IPO represents a return of the public markets for restaurants. There has been just one traditional initial public offering in the industry since 2015, the 2019 IPO of Kura Sushi USA, though companies have gone public using alternative strategies, notably “mini IPOs” or reverse mergers.

Several companies are considering their own initial public offerings, including the drive-thru coffee chain Dutch Bros, the fast-casual salad concept Sweetgreen, along with First Watch, Portillo’s and reportedly Panera Bread.

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