Krispy Kreme shares soar on $1.35-billion takeover offer

Krispy Kreme Doughnuts Inc. shareholders got a caffeine boost after coffee giant JAB Beech Inc. said Monday that it is acquiring the doughnut chain.

The Luxembourg-based JAB, an investment firm that owns Keurig Green Mountain, Peet’s Coffee & Tea and Caribou Coffee, said it is taking the North Carolina doughnut company private in a deal worth about $1.35 billion.

Krispy Kreme’s stock soared more than 24% in mid-session trading.

The deal comes after a JAB affiliate recently added to its coffee empire with the acquisition of Keurig, which makes single-cup coffee machines that sit on counter tops. JAB, which is predominantly owned by the Reimann family in Europe, also has stakes in Jacobs Douwe Egberts, the company behind Gevalia, Tassio and other brands.

Outside of coffee, JAB has stakes in bagel shop operator Einstein Noah, beauty products maker Coty and high-end shoe seller Jimmy Choo.

The companies said Krispy Kreme will continue to be independently operated from its headquarters in Winston-Salem, N.C. Krispy Kreme, which was founded in 1937, has more than 1,100 shops around the world, about 300 of which are in the U.S.

SIGN UP for the free California Inc. business newsletter >>

Krispy Kreme said in March that in its fiscal 2017, it planned to open about 120 to 140 new international locations, as well as about 30 new shops domestically.

Unlike its larger rival Dunkin’ Donuts, Krispy Kreme still gets most of its U.S. business from doughnuts and other pastries rather than coffee drinks and sandwiches. But Krispy Kreme has said that it wants to step up its beverage sales.

Peter Harf, a senior partner at JAB, said the acquisition is part of the firm’s strategy of investing in brands with significant growth prospects.

JAB is to pay $21 for each share of Krispy Kreme. That’s a premium of about 25% over the company’s Friday closing price of $16.86.

Krispy Kreme’s board unanimously approved the transaction, which is targeted to close in the third quarter. The company said it will postpone its annual shareholders meeting, which was originally set for June 14.

Krispy Kreme shares climbed $4.06, or 24.1%, to $20.92 in mid-session trading Monday. Its shares are up almost 20% over the past year.

MORE BUSINESS NEWS

Tribune Publishing adopts ‘poison pill’ plan to fend off Gannett

Judge dismisses mental competency case against Sumner Redstone

More investors seeking financial advice are turning to lower-cost options

UPDATES:

10:51 a.m.: This article was updated with additional information about JAB, more background information and a more recent stock price.

This article was originally published at 6:56 a.m.