Bloomberg reported earlier this week that Panera Bread was allegedly working with advisors to go over potential strategic options, aka was looking for a merger.
One of the sources referenced in the article said that JAB Holding, which owns Krisky Kreme and Peet’s Coffee & Tea, was looking at Panera as an investment.
On Wednesday, it became official that JAB Holdings plans to buy the fast casual chain for about 7.2 billion.
JAB, has invested in several coffee-focused empires, including Keurig Green Mountain Inc. and Caribou Coffee.
“By any measure, Panera has been one of the most successful restaurant companies in history. What started as one 400 square foot cookie store in Boston has grown to a system with over 2,000 units, approximately $5 billion in sales, and over 100,000 associates. In more than 25 years as a publicly traded company, Panera has created significant shareholder value. Indeed, Panera has been the best performing restaurant stock of the past twenty years – up over 8,000%. Today’s transaction is a direct reflection of those efforts, and delivers substantial additional value for our shareholders,” said Ron Shaich, founder and CEO of Panera Bread in a press release.
Panera has 2,000 stores and is known as being tech-savvy with its popular mobile app and loyalty program, along with its massive employment of kiosks within the last few years.
The shares jump 14.2 % this week and JAB offered $315 per share in cash to buy the brand, making this the second-biggest deal in North America history. Burger King’s purchase of Tim Hortons of $11.53 billion still remains as the highest.
Over the last six quarters, the company has consistently reported better-than-expected earnings per share. In the first quarter, Panera reported a 5.3% growth in sale at company-owned stores.
“We have long admired Ron and the incredible success story he has created at Panera. I have great respect for the strong business that he, together with his management team, its franchisees and its associates, has built. We strongly support Panera’s vision for the future, strategic initiatives, culture of innovation, and balanced company versus franchise store mix. We are excited to invest in and work together with the Company’s management team and franchisees to continue to lead the industry,” said Olivier Goudet, JAB Partner and CEO in a press release.
The companies expect to close the deal in the third quarter.