Krispy Kreme hopes to raise between $560 million to $640 million through its IPO, according to an SEC filing.
The doughnut chain is offering 26,666,667 shares at a price of $21 to $24 per share. That range implies a valuation of $3.46 billion to $3.96 billion. Underwriters have 30 days to decide whether to purchase up to an additional 4 million shares.
The company will use net proceeds from the offering to repay debt, repurchase shares of common stock from certain executives, make payments on tax withholdings relating to certain restricted stock, and for general corporate purposes. Krispy Kreme will be listed on the Nasdaq as “DNUT.”
Krispy Kreme earned net revenue of $1.1 billion in 2020—the highest sales level in history—and swung a net loss of $64.3 million, compared to $959.4 million in net revenue and a net loss of $37.4 million in 2019. In its most recent quarter, the company earned $321.8 million in net revenue compared to $261 million last year, and a net loss of $3 million compared to $11 million in the year-ago period. As of April 4, Krispy Kreme has 1,515 stores and 7,371 Delivered Fresh Daily locations across the globe.
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The doughnut brand also owns 191 Insomnia Cookies stores in the U.S. Krispy Kreme describes Insomnia as a digital-first brand, with 54 percent of sales coming through online channels in 2020. Seventeen stores opened in 2020 and another 30 are under construction for this year. The plan is to grow its capabilities to deliver next-day to more than 95 percent addresses in the U.S.
Krispy Kreme was public from 2000 to 2016 before being bought by JAB Holding for $1.35 billion. JAB also acquired Panera for $7.5 billion in 2017 and purchased British chain Pret a Manger for $2 billion in 2018.
Roughly 16.6 percent of Krispy Kreme’s shares would be available through the IPO. JAB is set to hold 38.6 percent of shares and give the rest to minority investors, CNBC reported. The company is also interested in purchasing between $50 million and $100 million in shares, and the group’s chairman Olivier Goudet is interested in buying $5 million in shares.
J.P. Morgan, Morgan Stanley, BofA Securities, and Citigroup are acting as lead book-running managers for the proposed offering. BNP PARIBAS, Deutsche Bank Securities, Evercore ISI, Goldman Sachs & Co. LLC, HSBC, Truist Securities, and Wells Fargo Securities are acting as joint book-running managers.
Capital One Securities, C.L. King & Associates, Credit Agricole CIB, Mischler Financial Group, Inc., MUFG, Ramirez & Co., Inc., Santander Investment Securities Inc., and Siebert Williams Shank, are acting as co-managers.
The most recent concept to go public is BurgerFi, which did so in late 2020 through special acquisition company OPES Acquisition Corp. In February, Fertitta Entertainment, which includes Golden Nugget Casinos and Landry’s, agreed to join Fast Acquisition Corp. in a deal that will value the company at $6.6 billion.
Kura Sushi USA, a revolving sushi-style restaurant, went the traditional IPO route in 2019. The concept raised $41 million in its initial public offering. Prior to Kura Sushi, Wingstop and Fogo de Chao went public in 2015. However, Fogo de Chao went private in 2018.