JAB Holding Co.'s growing expansion is kicking into high gear.
On Wednesday, the companies announced that JAB will buy Panera for $315 a share in a deal worth roughly $7.5 billion, taking the salad and sandwich chain private. The purchase price represents a 30% premium to Panera's 30-day average stock price as of March 31, the last trading day before rumors began to circulate that the company was close to making a deal.
The Panera acquisition brought JAB into the spotlight this morning but the company has been expanding its reach on the sidelines for some years now. Notable takeovers include its $13.9 billion buy of coffee pod maker Keurig Green Mountain (2015), its $1.35 billion purchase of doughnut maker Krispy Kreme (2016) and its $973.9 million acquisition of coffee brand Peet's Coffee & Tea (2012), not to mention that it owns beauty company Coty (COTY) .
With merger and acquisition activity anticipated to kick up further in 2017 within the restaurant industry, it's likely JAB's takeover of Panera won't be its final act.
As KeyBanc Capital Markets recently noted, the restaurant industry is "ripe for consolidation."
Here are three food brands JAB may be drawn to in the future.
Assuming Dunkin's more than $2.4 billion in long-term debt and portfolio of nearly 20,000 restaurants worldwide and growing digital offerings, JAB was said that it would have to cough up an offer of $9.3 billion.
Shares of Dunkin' are trading lower Wednesday by a little over 2% as the Panera acquisition seems to put the JAB takeover chatter to rest for now. Still, with JAB's increasing acquisition activity, a purchase of Dunkin' may not be completely written off. The company would add to JAB's portfolio of major coffee brands.
Multi-concept restaurant franchisor Focus Brands has all the ingredients for a perfect merger with JAB.
The privately-held Atlanta company, formed in 2004, owns ice cream brand Carvel, sweet snacks chain Cinnabon, pretzel maker Auntie Anne's and sandwich chain Schlotzsky's.
Focus, a subsidiary of private equity firm Roark Capital Group, would likely carry a hefty price tag considering it operates about 1,500 Auntie Anne's locations, 500 Carvel parlors, 770 Cinnabon shops and 350 Schlotzsky's stores. Still, Focus could provide a good value for JAB if Dunkin' is off the table.
Although Shake Shack (SHAK) wouldn't fit the typical mold of JAB's breakfast brand acquisitions, it would add value to the growing company.
The burger joint chain, operating about 114 restaurants, went public on Jan. 30, 2015, to a much enthusiastic Wall Street.
Despite its popular IPO, Shake Shack has seen its stock tumble roughly 28% since then. But, the company has consistently posted relatively strong financial results, including for its recent fourth quarter when same-store sales grew 1.6%. It might be beneficial for Shake Shack to be taken private again under a strong parent.