Krispy Kreme said it has completed two transactions that together will bring in about $160 million in cash and cash-equivalent proceeds before fees and a note payable, with nearly all of that money earmarked for debt reduction.
On March 23, the company closed a deal with WKS Restaurant Group that lifted WKS’s ownership in the western U.S. joint venture from 45% to 80%. The transaction is worth about $90 million in total to Krispy Kreme, including roughly $50 million in cash at closing and a note payable over time. As part of the deal, the joint venture added 23 shops in California and Hawaii that had been operated by Krispy Kreme directly.
The western U.S. joint venture now includes 50 existing shops across the region, plus about 1,000 fresh delivery points with partners including Kroger, Target and Walmart. Krispy Kreme said the venture also agreed to develop additional shops and expand its fresh delivery footprint over the next several years.
Earlier, on March 2, Krispy Kreme closed the sale of its Japan operations to Unison Capital. That transaction generated nearly $70 million in cash proceeds after transaction-related fees and expenses, and the company said the money was used to pay down debt.
Taken together, the two deals move Krispy Kreme further into a refranchising strategy centered on capital-light growth and deleveraging. The market has reacted to these announcements by moving the company's shares -1.76% to a price of $3.63. Check out the company's full 8-K submission here.
