Coffee & a Bagel
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Bagel Maker Einstein Noah Sold to German Firm for $374 Million
By William Alden September 29, 2014 10:13 amSeptember 29, 2014 10:13 am
Photo
Credit Einstein Brothers Bagels
On today’s menu: bagels, with a Wall Street buyout.
The Einstein Noah Restaurant Group, whose bagel shops include Einstein Brothers Bagels, Noah’s New York Bagels and Manhattan Bagel, said on Monday that it would sell itself to JAB Holding Company, a German conglomerate formerly called Joh. A. Benckiser, for about $374 million.
The price of $20.25 a share in cash represents a 47 percent premium over Einstein Noah’s 30-day average trading price, the company said.
Shares of Einstein Noah, listed under the ticker symbol BAGL, shot up 50 percent at the start of trading on Monday, to $20.11 a share.
The deal, in theory, could yield some breakfast-oriented synergies. The buyer, an investment vehicle for the wealthy Reimann family of Germany, already controls a coffee empire: Through three deals in 2012 and 2013, it acquired Peet’s Coffee & Tea, Caribou Coffee and D.E Master Blenders.
But JAB’s interests are not confined to the most important meal of the day. It also owns shoe brands like Jimmy Choo and Bally, and has a majority stake in the beauty company Coty.
Einstein Noah will remain headquartered in Lakewood, Colo., should the deal close. And it said it would operate as a stand-alone business in the JAB portfolio. Michael Tattersfield, the chief executive of Caribou Coffee, would become Einstein Noah’s chairman.
David Einhorn, whose hedge fund is Einstein Noah’s largest shareholder, with a stake above 35 percent, said he supported the sale to JAB. He called the deal a “win-win for all parties.”
“For more than a decade, we have worked closely with the Einstein Noah Restaurant Group to execute a turnaround plan, reducing debt and expanding its store footprint,” Mr. Einhorn said in a statement. “J.A.B. is an experienced firm that will lead Einstein Noah Restaurant Group into its next phase of growth.”
The deal has been approved by the bagel maker’s board but is subject to a majority of investors tendering their shares. Mr. Einhorn’s hedge fund, Greenlight Capital, plans to tender its shares in support of the deal.
E. Nelson Heumann, the chairman of Einstein Noah, said in a statement that the deal would help the company “continue to revitalize our brand, enhance our nationwide footprint and solidify our position as the leader in the fresh-baked bagels industry.”
BDT Capital Partners, a merchant bank in Chicago run by Byron D. Trott, is a minority investor in the deal alongside JAB. The bank, along with Citigroup, also provided advice to JAB, while Skadden, Arps, Slate, Meagher & Flom provided legal advice.
Einstein Noah was advised by Stifel and the law firm Alston & Bird.
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