Updated with additional details from Krispy Kreme spokesman and comments from Jim Cramer.

Krispy Kreme's (KKD) CEO wasn't kidding around when he told TheStreetlast December he viewed coffee beverages as a major opportunity for the iconic donut chain.

The 79-year-old glazed donut seller announced Monday it will be acquired by JAB Holding Company for $21 per share in cash, or a total value of approximately $1.35 billion. The agreement represents a premium of approximately 25% over Krispy Kreme's closing price on May 6.

Internationally based JAB, a private company that plunked down $13.9 billion last year to purchase coffee pod maker Keurig Green Mountain, also owns Peet's Coffee & Tea and Caribou Coffee. The company has controlling stakes in Jacobs Douwe Egberts as well, a coffee and tea giant that owns Gevalia, among other brands.

According to a Krispy Kreme spokesman, talks between the two companies began late last year. It does not expect any leadership changes, said the spokesman.

"JAB is really putting together an amazing conglomerate. They want to own the morning," said Jim Cramer, TheStreet's founder. "I think JAB has a balance sheet that could make Krispy Kreme a formidable competitor" to Starbucks (SBUX) - Get Starbucks Corporation Report and the Dunkin' Donuts division of Dunkin' Brands (DNKN) - Get Dunkin' Brands Group, Inc. Report .

"In the end, coffee is a growth market, so I don't think this deal will hurt anyone," said Cramer, who is also the manager of the Action Alerts PLUS portfolio, which owns Starbucks.

Starbucks is a holding in Jim Cramer'sAction Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells SBUX? Learn more now.

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Krispy Kreme CEO Tony Thompson in a statement that "JAB's experience and industry knowledge make them the ideal partner to help grow the iconic Krispy Kreme brand throughout the world."

Being under the JAB stable should help Krispy Kreme move forward more quickly with its desire to roll out coffee beverages in retail stores and supermarkets to better compete with the likes of Starbucks, Dunkin' Donuts and Tim Horton's, part of Restaurant Brands International (QSR) - Get Restaurant Brands International Inc Report .  

That desire to be more than just a donut maker recently led Krispy Kreme to open a test shop outside Salem, N.C., that better highlights its beverage offerings on menu boards. The shop has a warmer, more contemporary feel that is designed to keep people in the restaurant eating donuts and drinking coffee.

"Beverages are a big opportunity for us, coffee specifically -- overall, it's only about 5% of our sales," said Thompson in a December interview with TheStreet, adding, "It's always been a part of who are, but it has kind of passed us up."

At the time, Thompson also said Krispy Kreme wasn't for sale, despite a plunge in its stock price, continued turnaround and clean balance sheet. "Right now we are focused on what we do, that's donuts, coffee and building shops -- we are not looking to do something significantly outside of that -- I think Krispy Kreme is a unique, iconic brand and it could stand alone on its own two feet."

The deal ultimately represents quite the reversal in fortunes for Krispy Kreme under Thompson's leadership.

Krispy Kreme grew aggressively in the early 2000s, which came back to bite the chain as it saturated the market for its products. Then in the mid-2000s it found itself in an accounting scandal, and went on to close hundreds of stores.

"In general, Krispy Kreme is a big international company that people were undervaluing in part because for a very long time they were missing quarters - but this is obviously worth more to a coffee company in JAB than it is to the public markets," Cramer added.

Thompson joined Krispy Kreme in June 2014 as CEO after serving as operating chief at Papa John's (PZZA) - Get Papa John's International, Inc. Report , and has worked to get the chain back to the basics of making quality donuts and thoughtfully opening new stores. Krispy Kreme's same-store sales rose a solid 3.9% last year, while earnings increased 14.2% from the prior year.

The company expects earnings of 87 cents a share to 91 cents a share this year, up about 12.5% year over year. It plans to open 30 new U.S. stores and about 120-140 mostly franchised units internationally.