Fast-casual restaurant chain Panera Bread, backed by German family office JAB Holding Co., announced Thursday, Nov. 8, that it will acquire its corporate cousin Au Bon Pain Holding Co., backed by private equity firm LNK Partners LLC. The terms of the deal were not disclosed.
Panera and Au Bon Pain used to be part of the same company. Panera, then called Au Bon Pain Co., sold Au Bon Pain to private equity firm Bruckmann, Rosser, Sherrill & Co. LLC for $78 million in 1998; the firm subsequently sold Au Bon Pain to foodservice company Compass Group plc in 2000. The company's management then bought out control of the company with PNC Mezzanine Capital in 2005, three years before LNK's recapitalization, which included an equity investment of more than $100 million.
The 2008 recap, which valued the company at $250 million, was the firm's second-ever deal.
JAB on July 18 closed its $7.5 billion acquisition of Panera Bread Co., the biggest ever U.S. restaurant deal. Founder and CEO Ron Shaich agreed to tender his 15.5% stake in the St. Louis company in favor of the transaction and to run the business independently along with his management team. Shaich told TheStreet at the time that private ownership would allow the company to take a long-term view.
"With the acquisition we are announcing today, we are bringing Au Bon Pain and Panera together again," Shaich said in a statement. "This acquisition offers the strategic opportunity for us to grow in several new real estate channels, including hospitals, universities, transportation centers and urban locations, among others."
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Boston-based Au Bon Pain has 304 worldwide units, while Panera had 2050 as of Sept. 26.
JAB, an investment vehicle controlled by members of Germany's Reimann family, owns several coffee chains, including Peet's Coffee & Tea Inc., acquired for $974 million in 2012; Caribou Coffee Co., acquired for $340 million in 2012; Einstein Noah Restaurant Group Inc., acquired for $374 million in 2014; Keurig Green Mountain Inc., acquired for $13.9 billion in late 2015; and Krispy Kreme Doughnuts Inc., acquired last year for $1.35 billion.
Peet's itself has acquired several coffee chains while owned by JAB, including Stumptown Coffee Roasters Inc., Intelligentsia Coffee Inc., Denmark's Baresso Coffee A/S, Sweden's Espresso House and Mighty Leaf Tea Co.
JAB also paid over $10 billion for D.E. Master Blenders 1753 NV in 2012 and holds a majority stake in Jacobs Douwe Egberts BV, a joint venture in which Mondelez International Inc. (MDLZ - Get Report) holds the balance.
JAB's nonfood holdings include Coty Inc. (COTY - Get Report) , luxury brands such as Bally and a 6% stake in Reckitt Benckiser Group plc. JAB in April put the luxury brands for sale to focus its portfolio on consumer goods. Subsequently, Michael Kors Ltd. (KORS) paid $1.35 billion for JAB's Jimmy Choo plc, and on Oct. 30 British petrochemical group Ineos acquired JAB's Belstaff outerwear brand.
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