Although JAB Holding Co. will become a restaurant powerhouse when it completes the $7.5 billion acquisition of Panera Bread Co., it remains relatively unknown. Here’s a look at the company, its holdings, and how it’s quietly building a potent lineup of coffee and bakery brands.
Who’s behind it?
JAB is principally owned by the Reimann family, an Austrian clan that amassed considerable wealth from the chemicals business during the 19th century. Among the partners of patriarch Ludwig Reimann was Johann Benckiser, of Reckitt Benckiser fame, the home products and foodservice supply company that JAB still owns.
The current ownership generation consists of four of the nine children who were adopted by Albert Reimann Jr., a direct descendant of Ludwig. Each of the nine was left an 11.1% stake upon their adoptive father’s death. Five subsequently sold their shares to siblings.
What’s in its portfolio?
The biggest restaurant brand is Krispy Kreme, the doughnut chain that JAB bought in mid-2016 for $1.35 billion. Already in the fold were Peet’s and two of its acquisitions, Mighty Leaf Tea and Stumptown Coffee. Other coffee-dependent retail businesses include Tully’s, Timothy’s, Espresso House (a Scandinavian chain), Baresso Coffee (Denmark), Caribou, the Einstein Bros. and Noah’s Bagels chains, and the industry suppliers Douwe Egberts, Gevalia, Keurig and French’s.
It also has extensive holdings in the beauty-products market, including CoverGirl, Clairol Professional, Chloe, Calvin Klein and Coty.
Miscellaneous other brands include Woolite, Calgon, Mucinex, Clearasil and Scholl.
Flip or hold?
JAB stresses that it is a long-term, strategic investor, not an opportunist exploiting short-term market trends. It’s stated interest is in “premium brands” with “attractive growth and strong margin dynamics.”
Virtually all of its restaurant holdings are coffee sales channels. Panera fits the mold. The fast-casual chain’s coffee program is undistinguished and generic, providing an opportunity for JAB’s beverage brands.
How deep are its pockets?
JAB’s acquisition activity has earned it a reputation as a buyer that will spend liberally for a sought-after brand. Its biggest acquisition to date appears to be Keurig, which it agreed to buy in late 2015 for $13.9 billion.
The company agreed to pay Panera’s shareholders a 20% premium above the stock’s trading price, or 41 times the bakery-cafe chain’s prospective earnings and 17 times earnings before interest, taxes, depreciation and amortization for 2017, according to the New York Times newsletter DealBook.
JAB reported an income of about $1.4 billion for 2016.
Who manages the company?
JAB has three managing partners, including two U.S.-educated executives. All three have had considerable exposure to the U.S. restaurant industry through directorships of such operations as Burger King, Caribou Coffee, Peet’s Coffee, Einstein Noah Restaurant Group and Anheuser-Busch InBev.
The CEO is Olivier Goudet, an engineer by training who also serves as chairman of Peet’s, Caribou, Einstein Noah and Keurig, which are all owned by JAB.
The chairman is Bart Becht, a former CEO of Reckitt Benckiser and the holder of an MBA from the University of Chicago.
The third partner is Peter Harf, who specializes in JAB’s luxury brands, including Jimmy Choo.