The privately held JAB Holding Company announced on Wednesday that it has agreed to buy Panera Bread for $7.5 billion in cash, including debt. JAB will add the Panera restaurant chain to its growing empire of American coffee. Following the close of the transaction, Panera will be privately held and continue to be operated independently by the company’s management team, including CEO and founder Ron Shaich.
JAB Holding, the investment arm of the Reimann family of Germany, owns Krispy Kreme, Einstein Brothers, Caribou Coffee, Keurig Green Mountain, and Peet’s Coffee & Tea, as well as European coffee giants like D.E. Master Blenders and Stumptown Coffee Roasters and brands such as Gevalia, Tullys and Moccona.
In Panera, JAB will acquire a popular fast casual chain that serves soups, salads, and baked goods at approximately 2,000 locations, 60 percent of which are owned by franchisees. Panera went public in 1991, but the “healthy options” chain has chafed under Wall Street’s demand for growth.
Panera CEO and Founder Shaich, controls approximately 15 percent of its stock and said one of the best attractions to the JAB deal was the chance to take his company private. “For the last 20 years, I’ve spent 20 percent of my time telling people what we’ve done to grow and another 20 percent of the my time telling people what we’re going to do to grow,” Shaich said. “I won’t have to do that anymore.”
Under the terms of the transaction, JAB will pay $315 per Panera Share–a 30-percent premium to the stock’s closing price on March 31, the last trading day before media reports of the potential deal surfaced. The purchase price, which includes $340 million in net debt, is also a 30-percent premium to Panera’s 30-day average stock price.
The transaction is expected to close in the third quarter and is subject to shareholder and regulatory approval.
