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Shorts Crushed After JAB Acquires Panera In Largest Ever US Restaurant Deal

Wednesday, April 5, 2017 11:33
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(Before It's News) / by Tyler Durden / Apr 5, 2017

Luxembourg-based JAB Holdings, the acquisitive owner of Caribou Coffee, Peet’s Coffee & Tea and Krispy Kreme, confirmed swirling speculation this morning when it announced it would acquire U.S. bakery chain Panera Bread for $315/share – a 20% premium – in a deal valued at about $7.5 billion. If completed, the transaction would mark the largest M&A deal for a US restaurant company, and the second-largest in North America after the 2014 acquisition of Tim Horton’s.

The deal represents a whopping 18x LTM EBITDA, and includes the assumption of about $340 million of net debt, JAB Holdings and Panera said in a joint statement. Panera founder and Chief Executive Ron Shaich and entities affiliated have agreed to vote shares representing about 15.5 percent of the company’s voting power in favor of the deal.

Panera has 2,000 bakery cafes throughout the United States and its fresh offerings appeal to “health-conscious” consumers. The St. Louis-based company has reported better-than-expected earnings per share for the last six quarters.

The deal, meant to compliment and expand JAB’s coffee and breakfast assets, had been leaked in recent days, with Panera shares rising 5% from March 31 through Tuesday’s close of $274. The stock jumped nearly another 13% to $309.49 in premarket trading on Wednesday. The purchase by JAB, the investment vehicle of Germany’s billionaire Reimann family, has recently been on a restaurant buying spree, snapping up several popular U.S.-based breakfast and coffee companies, including Krispy Kreme Doughnuts and K-cup coffee pod-maker Keurig Green Mountain Inc. JAB Holding also has controlling stakes in cosmetics company Coty Inc and luxury goods maker Jimmy Choo among many other companies.


The post Shorts Crushed After JAB Acquires Panera In Largest Ever US Restaurant Deal appeared first on Silver For The People.


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