Panera Bread Company is off the market.
The 2,000-unit chain announced today that JAB Holding Company will acquire it for $315 per share in cash in a transaction valued at approximately $7.5 billion, including the assumption of approximately $340 million of net debt. Although the chain will be privately held, it will continue to be operated independently by the company's management team, according to a company press release. Panera first went public in 1991.
JAB Holding Company and JAB Consumer Fund are well versed in the coffee business. They have controlling stakes in Keurig Green Mountain, Peet's Coffee & Tea, Caribou Coffee Company, Einstein Noah Restaurant Group, Krispy Kreme Doughnuts and Espresso House, the largest branded coffee shop chain in Scandinavia and jacobs Douwe Egberts, the largest pure-play FMCG coffee company in the world.
"By any measure, Panera has been one of the most successful restaurant companies in history," Shaich said in the release. "What started as one 400-square-foot cookie store in Boston has grown to a system with over 2,000 units, approximately $5 billion in sales, and over 100,000 associates.
"In more than 25 years as a publicly traded company, Panera has created significant shareholder value. Indeed, Panera has been the best performing restaurant stock of the past 20 years — up over 8,000 percent. Today's transaction is a direct reflection of those efforts, and delivers substantial additional value for our shareholders."
Olivier Goudet, JAB Partner and CEO, said he has long admired Shaich and the success story he has created at Panera.
"I have great respect for the strong business that he, together with his management team, its franchisees and its associates, has built," he said. "We strongly support Panera's vision for the future, strategic initiatives, culture of innovation, and balanced company versus franchise store mix. We are excited to invest in and work together with the company's management team and franchisees to continue to lead the industry."
Shaich said over the last five years the chain has developed a powerful strategic plan to be a better competitive alternative with emerging runways for growth.
"The themes we have bet on — digital, wellness, loyalty, omni-channel, new formats for growth — are shaping the restaurant industry today. Indeed, the power of the plan is evident in our business results."
Q1 2017 results
Panera pre-released Q1 2017 results — company-owned bakery-cafe comps were up 5.3 percent, which is 690 bps better than the Black Box all-industry composite, Shaich said.
"Our success for shareholders is the byproduct of our commitment to long-term decision making and operating in the interest of all stakeholders, including guests, associates, and franchisees," he said. "We believe this transaction with JAB offers the best way to continue to operate with this approach. 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."
As of press time, Panera Bread had not returned FastCasual's request for comment.
Cover photo: iStock