Krispy Kreme seeks $3.9bn IPO valuation

US bakery and coffee chain Krispy Kreme is seeking to raise between $560m and $640m in an IPO that could value the company at up to $3.9bn, an SEC filing has revealed.

Krispy Kreme said it would use the net proceeds from the offering to repay debt, repurchase shares of common stock from executives, fulfil tax obligations, as well as for ‘general corporate purposes.’

Indicating the business has faced challenging market conditions over the last few years, Krispy Kreme reported a 17% increase in revenues to $1.12bn but a net loss of $60.9m for its fiscal 2020. The bakery and coffee chain also reported revenues of $959.4m and a net loss of $34.7m in 2019.
 
In the SEC filing, Krispy Kreme said e-commerce and digital transactions would be key to its future market strategy. ‘With the expansion of this channel, we believe we can leverage valuable consumer data to acquire new consumers and extract higher consumer lifetime value by creating relationships with them outside of our shops’, the company stated.
 
In addition to its 1,500+ stores globally, Krispy Kreme also operates 191 Insomnia stores, a US bakery café concept it describes as a ‘digital-first brand’. Krispy Kreme reports 54% of Insomnia sales came from e-commerce channels during 2020, with the chain offering next-day delivery to more than 95% of US addresses.
 
Krispy Kreme went private in May 2016 after it was acquired by Luxembourg-based conglomerate JAB Holding Company in deal worth $1.35bn. It is the latest JAB Holdings-controlled coffee company to either launch or reportedly consider an IPO. In June 2020 JDE Peet’s, raised $2.5bn with an IPO that valued the company at $17.3bn.
 
In April 2021 Panera Bread was reported to have completed an $800m refinancing, a move which could pave the way for the company to go public after JAB Holdings took the company private in 2017 as part of its $7.5bn acquisition.
 
Krispy Kreme opened its first store in North Carolina in 1937. It now sells branded bakery and coffee products in 12,000 grocery and convenience stores in the US and operates nearly more than 1,500 stores in 33 countries. Today, the company promotes that it makes 4,560 doughnuts every hour.
 
Krispy Kreme competes with bakery and coffee chain rival Dunkin’ in the US, which in December 2020 went private after being acquired by Inspire Brands Inc. for $8.76bn.