Panera Brands is exploring a sale of Caribou Coffee and Einstein Bros Bagels, as well as its other bagel brands, in a deal that could value the restaurant chains at more than $1.5-billion, according to people familiar with the matter.
St. Louis-based Panera Brands, which is backed by private equity firm JAB Holding, has tapped Bank of America to run a sale process for the brands, the sources said. Other restaurant operators and private equity firms are interested in bidding for the assets, they said.
In addition to Einstein Bros, Panera is looking to sell Bruegger’s Bagels, Noah’s New York Bagels and Manhattan Bagel, said the sources, who requested anonymity because the discussions are confidential.
Panera Brands, JAB and Bank of America all declined to comment. The latest move marks a reversal for Luxembourg-based JAB, which combined Panera Bread, Caribou Coffee and the bagel brands into the Panera Brands group in 2021.
Panera is hoping to command a valuation for the combined coffee and bagels businesses equivalent to more than 10 times their expected earnings before interest, taxes, depreciation and amortization of nearly $150-million in 2024, the sources said.
Minneapolis-based Caribou Coffee has more than 800 locations in 11 countries. The bagel brands have almost 1,000 locations across the U.S.
JAB had been laying the groundwork for an initial public offering of Panera Brands over the past year, one of the sources said, adding that it could pursue a listing of the remaining Panera Bread unit if the talks to divest the coffee and bagel chains are successful. Panera Bread generates a majority of the group’s revenues.
Founded in 1987, Panera Bread was launched as a community bakery that was originally known as the St. Louis Bread Company.
JAB manages over $50-billion of capital and owns stakes in household consumer names like Keurig Dr Pepper and Krispy Kreme.