Krispy Kreme announced Tuesday that it has sold its remaining 34 percent stake in Insomnia Cookies for $75 million to Misral Equity Partners and Verlinvest.
The move comes nearly a year after Krispy Kreme sold a majority ownership stake to the two private equity firms.
The doughnut chain will use the proceeds to pay down debt, which stands at around $1 billion.
“We continue to take swift, decisive action to de-leverage our balance sheet and drive sustainable, profitable growth,” Krispy Kreme CEO Josh Charlesworth said in a statement. “This is an important step as we focus on our two biggest opportunities: profitable U.S. expansion and capital-light international franchise growth. We wish Insomnia Cookies and their ownership group well as they work to realize the full potential of this unique brand.”
Insomnia Cookies now has nearly 350 locations in the U.S., Canada, and the U.K. Under ownership, which is partnering with founder Seth Berkowitz, the chain hopes to reach 1,800 global locations over the next decade.
“We’re excited for this next phase of growth with Verlinvest and Mistral Equity Partners,” Berkowitz said in a statement. “We’re united by a shared vision: to establish Insomnia as the undisputed leader in the indulgence category. With this support, we’re poised to rapidly scale and deliver more warm, delicious cookies to Insomniacs around the world.”
Insomnia Cookies brought in PepsiCo veteran Brent Chu as CFO, Starbucks veteran Katie Seawell as CMO, and Aramark veteran Stephanie Boughner as chief people officer.
“We believe Insomnia Cookies has all the ingredients to become a global icon in quality indulgence: a visionary founder, a cult-like following, and a clear edge in digital convenience,” Clément Pointillart, Verlinvest managing director, said in a statement. “We’re proud to deepen our commitment to Seth and the team as we help take Insomnia across the globe.”
Krispy Kreme announced it sold its majority stake in July 2024. The brand received $127.4 million from that sale and said at the time that it would receive another $45 million after Insomnia Cookies refinanced debt. The deal valued Insomnia Cookies at $350 million—double what it was worth when Krispy Kreme bought it in 2018.
Krispy Kreme divested from Insomnia Cookies so that it could focus on its core doughnut business, which has moved to a hub-and-spoke model of delivering fresh doughnuts every day to grocers, gas stations, convenience stores, pharmacies, restaurants, and more.
When Krispy Kreme acquired a majority share seven years ago, there were 135 shops. By the end of Q1 2024, there were 277 shops nationwide. Krispy Kreme once said that the chain had room for 4,000 locations worldwide.
Profitability has been a focus for Krispy Kreme. The chain announced in May that it was pausing the expansion of its McDonald’s rollout because demand dropped below expectations. Charlesworth said Krispy Kreme and McDonald’s were working together to identify levers to improve sales, simplify operations, and position themselves for a profitable growth model.
The brand’s organic revenue declined $3.6 million in the first quarter, or approximately 1 percent, as growth was more than offset by consumer softness. In the U.S. specifically, organic revenue dropped $6.1 million, or 2.6 percent.
