Krispy Kreme has sold a majority stake in Insomnia Cookies to a pair of private-equity groups in a deal that values the chain at $350 million, the company said on Monday.
The doughnut chain, which said last year that it was putting Insomnia on the market, sold the cookie chain to Mistral Equity Partners and Verlinvest. Krispy Kreme is receiving $172.4 million from the sale and is keeping a 34% interest in the concept.
Mistral has made investments in chains like El Pollo Loco and Dunkin’, while Verlinvest has invested in numerous food and beverage brands such as the alternative milk maker Oatly.
Insomnia, known for its late-night cookie delivery, has quietly been one of the strongest-performing restaurant chains in recent years.
U.S. system sales have grown by an average of 13.4% the past five years, according to data from Restaurant Business sister company Technomic, through a combination of unit count growth and higher unit volumes.
That includes 17.7% sales growth last year. The chain generated $220 million in system sales in 2023 and operate 265 locations, up 74% over the past five years.
Seth Berkowitz, who will continue as Insomnia’s CEO, called the five-year partnership with Krispy Kreme “very successful” and said in a statement he is “thrilled to welcome Verlinvest and Mistral.”
Clément Pointillart, Verlinvest’s managing director, called Insomnia “an incredible brand so close to our core DNA and at a pivotal point in its growth trajectory.”
The Charlotte, North Carolina-based Krispy Kreme put Insomnia on the market last year, saying such a deal would “unlock shareholder value.”
But Krispy Kreme is also rapidly becoming something different, as much as a doughnut manufacturing and logistics company as it is a chain of doughnut shops.
“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,” CEO Josh Charlesworth said in a statement.
Krispy Kreme is receiving $127.4 million in the deal and said it expects to receive another $45 million after Insomnia refinances intercompany debt. Krispy Kreme plans to use proceeds from the deal to pay down debt and expand its doughnut business.
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