Doughnut company Krispy Kreme has sold a majority stake in bakery chain Insomnia Cookies to Verlinvest and Mistral Equity Partners for $127.4 million.
The company also expects to receive an additional $45 million in the coming weeks after Insomnia Cookies finishes refinancing its intercompany debt.
The transaction closed last week and represents a $350 million enterprise value, which has doubled since Krispy Kreme’s acquisition in 2018.
The company plans to use the proceeds to strengthen its fresh doughnut business and expand availability, as well as pay down debt. It still owns a 34 per cent minority stake in Insomnia Cookies following the deal.
As we build a bigger and better Krispy Kreme, this transaction allows us to focus on our core strategy of producing, selling, and distributing fresh doughnuts daily while also further strengthening our balance sheet,” said Josh Charlesworth, Krispy Kreme president and CEO.
Insomnia Cookies Founder Seth Berkowitz will continue his role as the bakery chain’s CEO after the transaction.
Krispy Kreme previously reported a 5.7 per cent increase in revenue to $442.7 million for the quarter ended March 31. The company’s GAAP net loss was $6.7 million compared to net income of $1.6 million in the prior year.
