JAB Holding Co., the sprawling investment firm that owns Krispy Kreme and Keurig Green Mountain, agreed to buy Panera Bread for about $7.2 billion, adding a bakery-cafe chain to a food empire that spans coffee, bagels and doughnuts.
The deal vaults JAB into the fast-casual restaurant market — a category that touts fresher ingredients and includes the likes of Chipotle Mexican Grill and Shake Shack. It also gives the firm access to lunch and dinner crowds, which its current roster of brands doesn’t reach as well.
For Americans, the transaction means one more household name will be under the banner of the little-known European holding company. JAB, an investment vehicle of Austria’s billionaire Reimann family, has already scooped up Caribou Coffee, the Einstein Noah Restaurant Group, Peet’s Coffee & Tea and Stumptown Coffee Roasters in a frenzied buying spree.
“No one’s ever gone about such an aggressive, far-reaching acquisition trail, with such a focus on the United States,” said Jeffrey Young, managing director of coffee consulting firm Allegra Strategies.
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“They’ve very quickly become one of the three most influential companies in coffee,” he said, with JAB standing alongside Starbucks and Nestle. “One wonders what is next for them.”
Under JAB’s umbrella, Panera could begin serving the firm’s Peet’s, Caribou or Stumptown coffee brands. Panera currently gets its coffee from Distant Lands Coffee, which is based in Renton, Wash., and has a roasting facility in Tyler.
The Panera purchase follows the game plan of JAB’s previous deals, where it grants control to a local management team. Panera Chief Executive Officer Ron Shaich, who founded the bakery chain and has become a well-known advocate for using natural ingredients, will continue to run the business after the acquisition.
“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,” Shaich said in a statement.
Panera investors will receive $315 per share in cash, according to Wednesday’s statement. That’s 20 percent higher than the closing price March 31, the last trading day before Bloomberg reported Panera was considering a sale.
Starbucks was the first suitor to express takeover interest in Panera, two people familiar with the situation have told Bloomberg. Starbucks is seeking ways to generate more money from food, and buying a bakery chain with more than 2,000 cafes across the U.S. and Canada would give it a massive presence in the category.
But the coffee giant has shied away from blockbuster deals. Its biggest transaction so far was the purchase of Teavana for about $600 million.
Panera has about $5 billion in systemwide sales. It has expanded steadily in recent years, growing from a single store in Boston to become one of the largest fast-casual competitors.