JAB Holdings, owner of Caribou Coffee and Krispy Kreme Doughnuts, announced on April 5 it would buy bakery chain Panera Bread Co. for $7.2 billion, as it expands its coffee and breakfast empire through the biggest-ever U.S. restaurant deal.
JAB, the investment vehicle of Germany's billionaire Reimann family, has built up an empire of coffee and food chains via several acquisitions in recent years, including that of K-cup coffee maker Keurig Green Mountain Inc.
Panera's fresh offerings appeal to health-conscious consumers. A few years ago, it lead the QSR industry in simplifying its food ingredients, producing a list of "no-no" ingredients that would be nixed at its 2,000 bakery cafes in the U.S It has been ramping up its loyalty program, rolling out kiosks to cut customers' waiting times and expanding its delivery service.
"By any measure, Panera has been one of the most successful restaurant companies in history," said Ron Shaich, founder, chairman and CEO of Panera. "What started as one 400-sq.-ft. cookie store in Boston has grown [into] 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 percent. Today’s transaction is a direct reflection of those efforts, and delivers substantial additional value for our shareholders."
Shaich, continued, saying in the last five years, Panera has developed and executed a powerful strategic plan to be "a better competitive alternative," with emerging runways for growth. "The themes we've bet on − digital, wellness, loyalty, omni-channel, new formats for growth − are shaping the restaurant industry today. Indeed, the power of the plan is evident in our business results ... This transaction with JAB offers the best way to continue to operate with this approach. We are pleased to join with JAB, a private investor with an equally long-term perspective, as well as a deep commitment to our strategic plan."
Olivier Goudet, JAB Partner and CEO, said, “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."
JAB is acquiring Panera through JAB BV, an investment vehicle of JAB Consumer Fund and JAB Holding Co. The transaction is not subject to a financing condition, and is expected to close during the third quarter of 2017, subject to the approval of Panera shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.