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JAB's Coffee-and-Food Empire Goes Global With Pret A Manger Deal

Updated on
  • Investment firm to pay $2 billion including net debt
  • JAB, backed by Reimann family, also owns Caribou, Au Bon Pain
JAB to Buy Majority Stake in Pret A Manger

With its acquisition of Pret A Manger, JAB Holding Co. is taking a quintessentially British institution -- the sandwich -- on a global expansion drive, adding the brand to its stable of restaurant chains that include Panera Bread Co. and Krispy Kreme Doughnuts.

JAB, the Luxembourg investment company backed by the billionaire Reimann family, agreed to buy U.K.-based Pret from private equity firm Bridgepoint Advisers Ltd., the parties said in a statement Tuesday, without disclosing terms. The price is about 1.5 billion pounds ($2 billion), including net debt, according to a person familiar with the matter.

For JAB, the move is one of its biggest outside the U.S., where it owns restaurant chains Panera and Au Bon Pain and high-end coffee brands Peet’s and Stumptown. About three-quarters of Pret’s 530 locations are in the U.K., with locations in the U.S., Hong Kong and France as well.

“This is about taking this brand globally,” Jeffrey Young, managing director at industry consultant Allegra Group, said by phone. “There are very few companies with that much footprint that have established themselves in Europe, North America and a little bit of Asia as well.”

JAB, run by Peter Harf, Bart Becht and Olivier Goudet, has spent more than $30 billion building its coffee-focused empire, which also includes Keurig Green Mountain Inc. of the U.S. and three chains in Europe -- Espresso House in Sweden, Baresso in Denmark and Balzac in Germany.

The firm has become a bigger challenger to Nestle SA, which owns the Nespresso coffee brand. The Swiss company responded this month by agreeing to pay $7.15 billion for the right to market Starbucks products from beans to capsules.

Organic Coffee

Pret A Manger sells organic coffee and sandwiches and salads made fresh daily in its stores, letting JAB tap into the growing consumer demand for lighter, healthier fare. The chain generates annual revenue of 879 million pounds, Bridgepoint said in the statement. Pret Chief Executive Officer Clive Schlee said 2017 was the ninth consecutive year of like-for-like sales growth.

The chain has room for further growth -- it’s opening in Berlin later this year, and has only two outlets in China and two in Dubai.

The move makes JAB an even bigger competitor to Starbucks Corp. and Dunkin’ Brands Group in the U.S. and Costa Coffee in the U.K. Shares of Whitbread Plc, which is spinning off Costa, fell 1.4 percent to 4,198 pence at 12:40 p.m. in London.

Read more: JAB Trio Creates Global Coffee Empire for Billionaire Family

“All of us at Pret believe JAB will be excellent long-term strategic owners,” Schlee said in the statement. The company will give 1,000 pounds to each of its 12,000 employees when the deal is completed, he said on Twitter.

JAB made an approach to buy Pret A Manger as Bridgepoint was considering a U.S. initial public offering of the company, Bloomberg News reported last year, citing people familiar with the situation.

Bridgepoint bought Pret A Manger a decade ago for about 350 million pounds. The sale represents a return of six times on Bridgepoint’s initial investment, according to a person familiar with the matter. The Financial Times reported earlier on the deal and the purchase price.

In January, JAB’s Keurig Green Mountain agreed to take control of Dr Pepper Snapple Group Inc. for $18.7 billion. JAB also is the largest shareholder in beauty company Coty Inc. and has a minority holding in consumer-goods maker Reckitt Benckiser Plc.

— With assistance by Thomas Buckley

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