Krispy Kreme Doughnut Corp. has long fed early morning sugar cravings with its iconic warm glazed doughnuts. But, now the Winston-Salem, N.C.-based doughnut chain is entering the late-night munchies market.
Krispy Kreme, owned by European investment company JAB Holding Co., announced plans Friday morning to acquire a majority stake in a bakery company that specializes in late-night delivery of warm baked goods. New York City-based Insomnia Cookies, founded in a college dorm room at the University of Pennsylvania, has now grown to nearly 140 locations across the country. The bakery company earned its early fame among college students, as Insomnia delivers up to 300 cookies to residence halls as late as 3 a.m.
Krispy Kreme Doughnut did not disclose terms of the deal, nor did the company discuss how it plans to leverage the cookie delivery company.
In a statement, Krispy Kreme CEO Mike Tattersfield said the 81-year-old doughnut brand is “delighted” to add the rapidly growing Insomnia Cookies to its portfolio. The cookie company sells traditional cookies, brownies and party packs. Its website shows new stores entering California, Arizona and Washington state.
“While our companies will continue to operate independently, these two great brands can learn a great deal from each other as we each continue to expand and grow,” he said.
When asked to comment beyond the press release, a Krispy Kreme spokeswoman declined to offer further details about the acquisition.
Seth Berkowitz, who founded Insomnia 15 years ago while in college, said in a statement that he and Tattersfield share the same ambitions for their brands: “To be the best at what we do and delight consumers with the highest quality sweet treat experiences,” he said in a statement. “My team and I are confident that this shared vision makes Krispy Kreme the ideal partner to support Insomnia through our next phase of growth.”
The transaction is expected to close in the fourth quarter of 2018. Berkowitz will continue to lead the cookie company, which will operate independently, Krispy Kreme said.
The Insomnia acquisition, according to CNBC sources, would value the cookie company at about $500 million.
Insomnia will join a JAB Holding Co. portfolio that already includes several brands specializing in baked goods and treats. The company acquired Krispy Kreme Doughnuts Inc. for $1.35 billion in 2016 and last year acquired Panera Bread Co. in $7.5 billion deal last year. JAB also owns Einstein Noah and its Peet’s Coffee & Tea and Caribou Coffee divisions as well as other food brands like Keurig Green Mountain coffee.
Krispy Kreme has about 1,400 locations in 32 countries.
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