Krispy Kreme sells majority stake of Insomnia Cookies
Krispy Kreme is doubling down on its doughnuts business.
Krispy Kreme said it has sold its majority ownership stake of Insomnia Cookies to Verlinvest and Mistral Equity Partners. The company received $127.4 million for the sale and expects to receive an additional $45 million in the coming weeks following an Insomnia Cookies refinancing of intercompany debt.
The deal represents a $350 million a total enterprise value of $350 million, which has doubled since Krispy Kreme acquired the Philadelphia-based bakery concept in 2018. In October 2023, the company said it was considering strategic alternatives for the business.
Founded in 2003, Philadelphia-based Insomnia Cookies operates more than 250 locations worldwide. Stores offers a wide variety of cookies, ice cream, and other sweets, which are also available for local delivery (with late-night delivery until 1 a.m. or later) and nationwide shipping.
“As we build a bigger and better Krispy Kreme, this transaction allows us to focus on our core strategy of producing, selling, and distributing fresh doughnuts daily while also further strengthening our balance sheet,” said Josh Charlesworth, president and CEO, Krispy Kreme.
Krispy Kreme intends to use the proceeds to further strengthen its fresh doughnut business and expand availability, as well as pay down debt. It will continue to hold an approximate 34% share in Insomnia Cookies as a minority shareholder.
"Following a thorough review, we are confident that Verlinvest and Mistral are the right partners to share in the success of Insomnia Cookies given their food industry experience and long-standing track record of value creation,” Charlesworth said.
The transaction closed on July 17, 2024. Krispy Kreme received $127.4 million for the sale and expects to receive an additional $45 million in the coming weeks following an Insomnia Cookies refinancing of intercompany debt.
“Building off of a very successful five-year partnership with Krispy Kreme, we’re thrilled to welcome Verlinvest and Mistral to this new chapter of our journey,” said Insomnia Cookies founder Seth Berkowitz, who will continue in his role as CEO.
Clément Pointillart, managing director, Verlinvest stated, “We are enthusiastic about our investment in Insomnia Cookies, an incredible brand so close to our core DNA and at a pivotal point in its growth trajectory. We’re eager to support Seth and help unlock the full potential of the business both in the US and internationally.”
Evercore and Morgan Stanley & Co. LLC acted as financial advisors in the transaction.
