The 34-unit Crumbs Bake Shop cupcake chain will be acquired for $66 million and taken public by 57th Street General Acquisition Corp., the companies said Monday.
The deal, slated to close in March, includes $27 million in cash and about $39 million in stock for Crumbs' owners. The New York-based chain was founded in 2003 by Jason and Mia Bauer, who will continue to serve as chief executive and chief creative officer, respectively.
After the transaction closes, Crumbs is expected to be listed on the Nasdaq exchange, said 57th Street, a blank-check acquisition firm led by chairman and chief executive Mark Klein.
Officials from Crumbs and 57th Street said they plan to grow the chain to 200 locations by the end of 2014.
“The cupcake category is a unique subsection of the burgeoning fast-casual segment of the restaurant industry, and Crumbs has emerged as the cupcake leader with significant long-term potential,” Klein said.
Crumbs had 2010 sales of $31.1 million from 34 locations in six states, including 14 shops in New York. In addition to its signature cupcakes, the concept sells cakes, pies and pastries, along with tea, coffee and housemade sodas. The average check ranges from $18 to $20, with many customers purchasing large orders of cupcakes, Crumbs said. The brand also sells its cupcakes online for shipment nationwide.
“Mia and I never could have envisioned how far Crumbs would come when we started eight years ago,” Jason Bauer said in a statement. “This transaction is a statement for us about how many lives Crumbs has touched and eight years of really hard work and the dedication of our amazing employees.”
Contact Molly Gise at [email protected].