Krispy Kreme has announced it is exploring strategic alternatives for Insomnia Cookies, including considering an all-cash sale.
The North Carolina-headquartered doughnut and coffee chain acquired a majority stake in Insomnia Cookies, the Philadelphia-based late-night bakery concept, in 2018.
Insomnia Cookies, which announced it would launch in the UK this year, has grown to over 250 sites across three countries since the acquisition.
It expects revenues of approximately $230m in the 2023 fiscal year.
The decision enables Krispy Kreme to unlock shareholder value and focus on its core strategy of producing, selling and distributing fresh doughnuts daily, according to the business.
Krispy Kreme CEO Mike Tattersfield said: “We acquired a majority stake in Insomnia Cookies to build our e-commerce and digital capability as well as assist Insomnia’s U.S. and International expansion. Both efforts have been successful and it’s time for the next strategic step for both companies.
“Krispy Kreme has expanded rapidly through our capital light omni-channel model, and the brand is now in 37 countries selling fresh doughnuts through nearly 13,000 points of access daily. Looking ahead, our goal is to expand to more than 75,000 points both by entering 3-5 new countries each year and developing new channels like quick service restaurants.”
Insomnia Cookies founder and CEO Seth Berkowitz said: “It has been an honor to partner with Krispy Kreme in an unprecedented chapter of growth for Insomnia Cookies. As we enter our 20th year of delivering warm, delicious cookies, we are now a sizeable multi-channel enterprise but still have a huge runway ahead in the attractive $700 billion indulgence industry*, and I look forward to leading our Insomniacs in our next phase of significant domestic and global expansion.”
Krispy Kreme has hired Evercore and Morgan Stanley & Co. LLC to act as financial advisors.
