A Krispy Kreme glazed donut is shown in Daly City, California, on May 12, 2022.
Justin Sullivan | fake images
Krispy Kreme is exploring strategic alternatives, including a cash sale, of its majority stake in Insomnia Cookies, the company said Tuesday.
The decision is part of an effort to focus more on its core donut business, the company said.
Krispy Kreme acquired control of Insomnia Cookies in 2018 in a deal backed by European investment firm JAB Holding. The deal valued Insomnia Cookies at less than $500 million, sources told CNBC at the time.
“We acquired a majority stake in Insomnia Cookies to build our digital and e-commerce capabilities, as well as to assist Insomnia’s international and U.S. expansion,” Krispy Kreme CEO Mike Tattersfield said in a statement. “Both efforts have been successful and it is time to take the next strategic step for both companies.”
Krispy Kreme went public for the second time in 2021, with an implied valuation of $2.7 billion. The donut chain first went public in 2000, but was taken private in a sale to JAB Holding in 2016.
Insomnia Cookies, known for serving cookies into the wee hours of the morning, has tripled its revenue since 2017, Krispy Kreme said Tuesday. The cookie chain has expanded from more than 135 locations in 2018 to 250 locations today.
The cookie chain was founded in 2003 by University of Pennsylvania student Seth Berkowitz, CEO of Insomnia Cookies. Bakeries are often located near college campuses to satisfy the cravings of students who stay up late into the night.
“It has been an honor to partner with Krispy Kreme on a chapter of unprecedented growth for Insomnia Cookies,” Berkowitz said in a statement.