The world’s largest coffee conglomerate just spent $1.35 billion on Krispy Kreme doughnuts

Krispy Kreme Doughnuts has agreed to a $1.35 billion takeover by a subsidiary of JAB, a private holding company owned and operated by four billionaire siblings who have cobbled together the world’s largest coffee conglomerate. Krispy Kreme adds to a list of JAB purchases that includes the Peet’s, Caribou Coffee, Intelligentsia, and Stumptown coffee businesses, along with Keurig Green Mountain (JAB led the investor group that acquired the capsule coffee maker in March for $13.9 billion). The holding company is run by members of Austria’s billionaire Reimann family, who built their wealth running a German chemicals concern. Krispy Kreme had long been a staple in the southern US, and was expanding beyond it at breakneck speed a decade ago. But the aggressive expansion took a toll on quality control, and on the brand’s cult status. In recent years, the North Carolina-based chain, which has more than 1,100 locations, tried pushing its way into Starbucks territory, in an attempt to align its low-key donut concept with higher-brow coffee culture. In late 2015, several Krispy Kreme locations even began referring to their staff as “baristas,” who would take customer names as they ordered. But growth remained stubbornly slow, and an international push didn’t do much to help turn the tide. “JAB’s experience and industry knowledge make them the ideal partner to help grow the iconic Krispy Kreme brand throughout the world,” Krispy Kreme CEO Tony Thompson said in a statement. JAB will pay $21 in cash for each share of Krispy Kreme, a 25% premium to their May 6 closing price. Krispy Kreme shares jumped to $20.96 in midmorning trading in New York. This isn’t the first change in ownership for the doughnut company, which was founded in Winston-Salem, North Carolina, in July 1937, and went on to flourish in the southeast US through the 1950s and 1960s. It was acquired by Chicago-based Beatrice Foods in 1976, then bought back by a group of franchisees in 1982.