Krispy Kreme, Inc. ( DNUT ) shares are trading higher in premarket today. The doughnut maker has sold a majority ownership stake in Insomnia Cookies to Verlinvest and Mistral Equity Partners for a total enterprise value of $350 million.

The transaction, which closed on July 17, 2024, has doubled in value since Krispy Kreme’s acquisition of Insomnia Cookies in 2018.

Insomnia Cookies is a late-night bakery concept headquartered in Philadelphia, Pennsylvania. Today, with over 250 locations worldwide, Insomnia Cookies offers a variety of cookies, ice cream, and other sweet treats in-store, for local delivery, and nationwide shipping.

The sale allows Krispy Kreme to concentrate on its core mission of producing, selling, and distributing fresh doughnuts daily while strengthening its financial position.

Krispy Kreme received $127.4 million from the sale and expects an additional $45 million following Insomnia Cookies’ refinancing of intercompany debt.

These proceeds will support Krispy Kreme’s fresh doughnut business expansion and debt reduction efforts, with Krispy Kreme retaining a 34% minority stake in Insomnia Cookies.

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“As we build a bigger and better Krispy Kreme, this transaction allows us to focus on our core strategy of producing, selling, and distributing fresh doughnuts daily while also further strengthening our balance sheet,” said Krispy Kreme President and CEO, Josh Charlesworth.

Seth Berkowitz, Founder and CEO of Insomnia Cookies, will remain in his role.

In May, the company reported first-quarter FY24 sales growth of 5.7% year-on-year to $442.698 million, beating the analyst consensus estimate of $434.104 million.

Krispy Kreme plans to update its full-year 2024 guidance during its upcoming second-quarter earnings call.

Krispy Kreme operates in more than 35 countries through its unique network of fresh doughnut shops, partnerships with retailers, and Ecommerce and delivery business with more than 14,000 fresh points of access. 

Price Action: DNUT shares are trading higher by 0.98% at $11.30 in premarket at last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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