Publicly traded Krispy Kreme has sold a majority ownership stake in Insomnia Cookies to Verlinvest and Mistral Equity Partners at an enterprise value of $350 million.
According to Krispy Kreme, the $350 million valuation is more than twice the valuation of Insomnia Cookies when Krispy Kreme acquired it in 2018. Post closing, Krispy Kreme will own a 34% minority equity interest in Insomnia Cookies.
Philadelphia-headquartered Insomnia Cookies specializes in late-night delivery of warm cookies, ice cream, and other sweet treats. The company targets college students and late-night snackers, operating primarily near university campuses with over 250 locations worldwide.
Insomnia Cookies offers in-store, local delivery, and nationwide shipping of its products and had revenues of $230 million in 2023. The company was founded in 2003 by CEO Seth Berkowitz while he was a student at the University of Pennsylvania.
“Building off of a very successful five-year partnership with Krispy Kreme, we’re thrilled to welcome Verlinvest and Mistral to this new chapter of our journey,” said Mr. Berkowitz, who will continue in his role as CEO of Insomnia Cookies.
“Following a thorough review, we are confident that Verlinvest and Mistral are the right partners to share in the success of Insomnia Cookies given their food industry experience and long-standing track record of value creation,” said Josh Charlesworth, the president and CEO of Krispy Kreme.
Krispy Kreme (NASDAQ: DNUT) operates in more than 35 countries through a network of doughnut shops, retail partnerships, and e-commerce sites. In 2023, the company had annual revenues of $1.7 billion which was a 10.2% increase from 2022.
“We are enthusiastic about our investment in Insomnia Cookies, an incredible brand so close to our core DNA and at a pivotal point in its growth trajectory,” said Clément Pointillart, a managing director at Verlinvest. “We’re eager to support Seth and help unlock the full potential of the business both in the US and internationally.”
Verlinvest makes control and non-control investments of €20 million to €200 million in private and public companies across a range of sectors including food and beverage, healthcare, consumer technology, pet, beauty and personal care, and active and outdoor brands. Verlinvest is the family office for the Spoelberch and de Mévius families, part of the AB InBev control group (Anheuser-Busch and Interbrew) and among the richest families in the world. The firm was founded in 1995 and is headquartered in Brussels with additional offices in London, New York, Los Angeles, Mumbai, and Singapore.
“We are excited to partner with the company through the next phase of its growth. Having known Seth since 2004, we are delighted to have the opportunity to work with him again as well as the best-in-class teams at Krispy Kreme and Verlinvest,” said Andrew Heyer, the founder and CEO of Mistral Equity Partners.
New York City-headquartered Mistral Equity Partners makes growth investments of $1 million to $15 million and buyout investments of $25 million to $50 million. The typical enterprise values of target companies range from $100 million to $300 million. Sectors of interest include, among others, food and beverage; consumer, retail, and consumer-focused products, services and technology; fast casual restaurants; media; pet; and lifestyle and leisure.
Evercore and Morgan Stanley were the advisors to Krispy Kreme on this transaction.
© 2024 Private Equity Professional | July 23, 2024
