Panera Bread is the buyer this time around, announcing Wednesday it has entered into a definitive agreement to acquire Au Bon Pain Holding Co., Inc. Terms of the deal, expected to close during the fourth quarter, were not disclosed.
Au Bon Pain, a Boston-based bakery-café chain, has 304 units worldwide. Panera said in a press release the purchase will be part of its initiative to intensify growth in new real estate channels, including hospitals, universities, transportation centers, and urban locations.
The deal has nostalgic tones as well. Ron Shaich, Panera’s founder, chairman, and CEO, created Au Bon Pain Co. Inc with his late partner Louis Kane in 1981. The company went public in 1991 and acquired Saint Louis Bread Company in 1993. St. Louis Bread was renamed Panera. Au Bon Pain was sold six years later so all resources could be diverted to Panera, a budding fast casual that would eventually expand past 2,000 locations.
“With the acquisition we are announcing today, we are bringing Au Bon Pain and Panera together again,” Shaich said in a statement. “This acquisition offers the strategic opportunity for us to grow in several new real estate channels, including hospitals, universities, transportation centers and urban locations, among others.”
Panera was one of the stock market’s top restaurant performers—delivering a shareholder return up 86-fold from July 18, 1997 to July 18, 2017—before going private in July with its purchase by JAB Holding Company. JAB, which also owns Krispy Kreme, Caribou Coffee, Keurig Green Mountain, Peet’s Coffee & Tea, acquired Panera for $7.5 billion.
Panera announced shortly after that Shaich was stepping down from the CEO role, effective January 1. Shaich will remain with Panera as chairman, while Blaine Hurst takes over as president and CEO.
The move, Panera said, will allow Shaich to better allocate his time between Panera; initiatives for JAB … and his personal investments and interests.”
Shaich will also remain a significant investor in the company. As chairman of Panera’s board of directors, he “will continue to work on strategy, communications and acquisitions for Panera. He will also pursue investments and causes important to him, with particular focus on working to reduce the pervasive short-term thinking in our capital markets and national debate,” Panera said.
Hurst has led many of the company’s significant innovations. He joined Panera in January 2011 as senior vice president of technology and transformation where he was asked to build the company’s digital capabilities and grow Panera’s 2.0 and e-commerce platforms. He was elected executive vice president of technology and transformation in May 2013 and executive vice president and chief transformation and growth officer in October 2014. Hurst was promoted to Panera’s president in December 2016.
“This is the right time for me to step down as CEO while still staying involved in the business as chairman,” Shaich said in a statement. “I returned in 2011 because our growth was slowing and we needed to reposition Panera as a better competitive alternative with expanded growth opportunities. And I’m happy to say we’ve done just that."
“I’ve now completed 36 years as a leader of our company and I’m particularly pleased to be able to say that Panera has been the best-performing restaurant stock of the last 20 years … I would like to recognize the phenomenal number of guests we have been able to serve during this time and I would like to thank my team members, franchisees, and suppliers for contributing to this extraordinary success,” he added.
Shaich said Hurst would help keep the momentum going. Panera’s digital capabilities have advanced to 1.3 million digital transactions per week, representing about 28 percent of the chain’s sales.
“Blaine has been a key player in our efforts to transform Panera during the past half-decade,” Shaich said. “He is very well known and respected in our organization and in our industry for his innovative thinking, technological savvy and ability to drive change. After years of working with Blaine, I am very confident that under Blaine’s leadership Panera will continue to outperform the industry and make a real difference in the lives of our guests and team members.”
“I’m very excited about the future of Panera,” Hurst said in a statement. “The past seven years have given me the opportunity to learn from an industry icon. And I have been fortunate to lead and be a part of many of the initiatives that are now driving Panera’s success. We’ve built a great team—in fact, it’s the best team I know of in the restaurant industry. I’m looking forward to continue working with them and our partners at JAB as we take Panera forward. With exciting new initiatives underway to better serve our customers and improve their dining experience, I believe our opportunity is even brighter. I thank Ron and JAB for their confidence in me.”
Panera generates about $5 billion systemwide sales, it said, and employs more than 100,000 people.
Au Bon Pain just launched a holiday menu on Tuesday. It has a history of operating in diverse markets, currently operating in six key trade channels, including urban office buildings, hospitals, universities, transportation centers, malls and museums.