Krispy Kreme announces $500m IPO
Doughnut giant prices public offering below initially reported range of $21 and $24 per share
US doughnut giant Krispy Kreme has priced its IPO of 29.4 million shares of common stock at $17 per share, as it seeks to raise $500 million.
Shares will commence trading today on the Nasdaq under the ticker symbol DNUT, with the IPO expected to close on 6 July.
Underwriters have been granted a 30-day option to purchase an additional 4.4 million shares as part of the IPO.
Investment banks Morgan Stanley, JPMorgan, B0fA securities and Citigroup are acting as lead book-running manager for the proposed offering.
The IPO has been valued at $2.7 billion, $1.3 billion less than the company had targeted back in June via initial documents filed with the US Securities and Exchange Commission (SEC).
The filing sought to offer 26.7 million shares priced between $21 and $24 per share.
The doughnut seller was founded in 1937 by Vernon Rudoph and is now present in 30 countries, with over a third of its global sales generated outside of North America in 2020.
In an SEC filing published in June, Krispy Kreme reported it had sold 1.3 billion doughnuts in fiscal 2020, generating a net revenue of $1.1 billion.
It gained over 38 billion total media impressions across all its digital platforms last year and is on course to beat this figure this year thanks to an initiative launched in March offering up free doughnuts to those that had received the Covid-19 vaccine.
“In recent years, we substantially invested in our business to accelerate performance and position us for long-term, sustained growth. We have invested in our omni-channel model, brand positioning, product quality and innovation capabilities,” the company stated in its SEC S-1 document.
In a note on stocks tracker site Seeking Alpha, analyst Vince Martin said of the public offering: “The IPO range doesn’t exactly move Krispy Kreme stock into meme territory in terms of the fundamentals, but the anticipated price does seem to imply that an awful lot goes right going forward.
“Add in a broad and deep lock-up expiration on the horizon, and it looks like caution should be advised here,” Martin wrote.
Krispy Kreme was bought by Keurig parent company JAB Holding Co for $1.35 billion in 2016.