The deal, announced yesterday (22 July), represents a $350m total enterprise value, double the valuation when Krispy Kreme acquired the US late-night cookie brand back in 2018.
Insomnia Cookies, which majors in serving warm cookies alongside cups of cold milk for dunking, was founded back in 2003 and currently operates some 285 sites across the US alongside a handful of locations in the UK and Canada.
As a result of the new partnership with Verlinvest and Mistral, the group says it is now prepared to accelerate its path to reach more than 1,800 bakeries in the US and beyond.
“Building off of a very successful five-year partnership with Krispy Kreme, we’re thrilled to welcome Verlinvest and Mistral to this new chapter of our journey,” says Seth Berkowitz, Insomnia Cookies founder, who will continue in his role as CEO.
“We now are poised to further accelerate our growth, exceed our long-term ambitions and most importantly deliver on the growing demand for warm, delicious treats from Insomniacs across the globe.”
Krispy Kreme received $127.4m for the sale and expects to receive an additional $45m in the coming weeks following Insomnia Cookies’s refinancing of intercompany debt.
It intends to use the proceeds to further strengthen its fresh doughnut business and expand availability, as well as pay down debt.
“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,” says Josh Charlesworth, Krispy Kreme President and CEO.
“Following a thorough review, we are confident that Verlinvest and Mistral are the right partners to share in the success of Insomnia Cookies given their food industry experience and long-standing track record of value creation.”
Insomnia Cookies made its debut in the UK last year in Manchester, where it now has three sites. Further openings in Sheffield and Nottingham are also planned.
Krispy Kreme retains an approximately 34% minority stake in Insomnia Cookies.
