Krispy Kreme Doughnuts (NYSE:KKD) Shares Looking Sweet After Acquisition Deal


Krispy Kreme Doughnuts (NYSE:KKD) stock prices rose 24.32% to $20.95 on Monday’s trading, after the company announced plans for acquisition by JAB Holding Company and minority investor BDT Capital Partners.

Krispy Kreme Doughnuts (NYSE:KKD) will be acquired by these groups in a $1.35 billion deal. JAB Holding Company is the investment arm of the Reimann family, the heirs to a German consumer goods conglomerate. It plans to add Krispy Kreme doughnuts to other quick-serve American coffee chains and a bagel company. These are Einstein Brothers Bagels, Peet’s Coffee & Tea, Stumptown Coffee Roasters, Caribou Coffee, and Keurig Green Mountain.

Krispy Kreme is best known for its doughnuts but it is also a retailer and wholesaler of complementary beverages, treats and packaged sweets. The acquisition by JAB could help the company improve its operations, add food and beverage options, and aid in expanding locally and internationally.

“We are thrilled to have such an iconic brand as Krispy Kreme joining the JAB portfolio,” shared Peter Harf, senior partner at JAB in a statement.  “This is yet another example of our commitment to investing in extraordinary brands with significant growth prospects.”

The acquisition of Krispy Kreme Doughnuts (NYSE:KKD) by JAB was made at $21 per share in cash, higher by 25% from Friday’s closing price. Share prices jumped on Monday to fill the gap of this acquisition price, especially since the company has no debt and has strong fundamentals.

The terms of the deal state that Krispy Kreme Doughnuts (NYSE:KKD) will remain independently operated from its headquarters in Winston-Salem, N.C. This transaction, which is still pending shareholder approval, is expected to be completed by the third quarter. The agreement has already been unanimously approved by Krispy Kreme’s board of directors. By the close of this transaction, the company will be privately owned and will no longer trade in public markets.


DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.