JAB Continues Expansion into U.S Restaurant Industry with $7.5B Acquisition of Panera Bread
ST. LOUIS — JAB Holding Co., the private investment firm that purchased Krispy Kreme Doughnuts last year, has agreed to purchase Panera Bread Co. (NASDAQ: PNRA) in a transaction valued at approximately $7.5 billion. JAB will acquire Panera Bread for $315 per share in cash and will assume approximately $340 million of net debt.
Panera Bread’s board of directors has unanimously approved the purchase agreement, which is expected to close in the third quarter of this year.
“We strongly support Panera’s vision for the future, strategic initiatives, culture of innovation and balanced company versus franchise store mix,” says Olivier Goudet, partner and CEO of JAB. “We are excited to invest in, and work together with, Panera’s management team and franchisees to continue to lead the industry.”
As of Dec. 27, 2016, there were 2,036 bakery-cafes in 46 states and in Ontario, Canada operating under the Panera Bread, Saint Louis Bread Co. or Paradise Bakery & Café names. Information about whether or not the transaction will affect Panera Bread’s restaurant locations was not disclosed.
After 25 years operating as a publicly traded company, Panera Bread will become private and continue to be operated independently by its management team. Speaking to The New York Times, Ron Shaich, founder, chairman and CEO of Panera Bread, says he’s looking forward to having the company go private.
JAB is acquiring Panera through JAB BV, an investment vehicle of JAB Consumer Fund and JAB Holding Co. Both JAB Holding Co. and JAB Consumer Fund are overseen by three senior partners: Goudet, Peter Harf and Bart Becht. Entities affiliated with BDT Capital Partners are also investing alongside JAB BV.
Morgan Stanley & Co. LLC is serving as financial advisor to Panera in the transaction, and Sullivan & Cromwell LLP is serving as legal counsel.
Luxembourg-based JAB Holding Co. is the investment arm of the billionaire Reimann family in Germany. Together, JAB Holding Co. and JAB Consumer Fund have controlling stakes in Krispy Kreme, Keurig Green Mountain, Jacobs Douwe Egberts, Peet’s Coffee & Tea, Caribou Coffee Co., Einstein Noah Restaurant Group Inc. and Espresso House, the largest branded coffee shop chain in Scandinavia.
JAB Holding also owns a controlling stake in luxury goods companies including Jimmy Choo, Bally and Belstaff.
St. Louis-based Panera Bread has generated more than $5 billion in sales annually and employed over 100,000 associates. The company’s stock price closed on Wednesday, April 5 at $312.94 per share, up from $211.11 per share at this time last year.
“Panera has been the best performing restaurant stock of the past 20 years – up over 8,000 percent,” says Shaich, who plans to vote his shares, which represent about 15.5 percent of Panera’s voting stock, in favor of the transaction.
— John Nelson