Krispy Kreme Is Going Public Again Following Private Ownership
In 2021, Krispy Kreme is going public for the second time. Its first IPO was in 2000 and it has been privately owned since 2016.
June 2 2021, Published 10:51 a.m. ET
The market isn’t just seeing IPOs of health food companies and clean energy stocks. Krispy Kreme, a longstanding company that specializes in donuts and coffee, has filed to go public in 2021.
Founded in 1937 in North Carolina, Krispy Kreme aims to “make the most awesome doughnuts on the planet every single day.” The company’s long history includes an IPO in 2000, filing for bankruptcy, a buyout, and now a second IPO.
Krispy Kreme’s first IPO
This won’t be the first time Krispy Kreme is a public company. In 2000, the company held its first IPO and listed on the Nasdaq under the ticker symbol "KREM". About one year later, it switched to the NYSE as "KKD" and had its stock price peak at $50 per share in 2003.
Krispy Kreme struggled as a public company and filed for Chapter 11 bankruptcy. This was following financial restatements, accounting practice investigations, and declining sales at some franchises. The SEC also imposed remedial actions for the company in 2009.
Why Krispy Kreme went private
Going private was likely a response to the company's struggles. In 2016, JAB Holding Co. bought Krispy Kreme for a reported $1.35 billion. JAB is a private holding company based in Germany that invests in companies across five categories—coffee and beverages, fast-casual restaurants, pet care, beauty and luxury, and indulgence.
Krispy Kreme was JAB’s first investment in the indulgence category. Since 2016, JAB has been introducing new flavors, treat designs, and online selling strategies. JAB also spent about $465 million to buy back stores owned by franchisees, according to Reuters.
Other companies that JAB has taken private include Keurig Green Mountain and Panera Bread. JAB has also taken JDE Peets public and plans to take Panera public in the future.
Krispy Kreme's valuation and IPO price
Krispy Kreme plans on an IPO price range of $21 to 24 to raise between $560 million and $640 million. At that price range, the company could fetch a valuation of $3.46 billion to $3.96 billion.
Krispy Kreme’s second IPO will face challenges, like competition from Starbucks and Dunkin’ Brands, which both feature coffee and sweet treats. In 2018, Krispy Kreme acquired Insomnia Cookies, a company known for its variety of sweet treats, including vegan options.
Krispy Kreme's revenue was $322 million in the quarter ended Apr. 4, compared with $261 million in the same period the year prior. Before reporting revenue growth of 8 percent in the first quarter of 2021, the company had reported revenue growth of 1 to 5 percent since 2018.
Krispy Kreme had a record-high net revenue of $1.12 billion in fiscal 2020, but a net loss of $60.9 million, according to CNBC. Its losses are partly due to investments back into the business, such as its new $10.3 million Times Square location.
When is Krispy Kreme going public?
Krispy Kreme filed its confidential paperwork with the SEC during the second quarter of 2021 and published its prospectus on June 1. The company intends to start trading on the Nasdaq under the ticker symbol "DNUT" on Jul. 1, 2021.
Following the IPO, JAB Holding Co. plans to keep 38.6 percent of shares. About 16.6 percent of Krispy Kreme's common shares are available via the IPO, and the remainder will be distributed to minority investors. JPMorgan Chase and Morgan Stanley are among the offering's lead managers.