Panera Brands has announced that it has not extended its investment agreement with USHG Acquisition Corp, citing unfavourable capital market conditions for the decision
Panera Brands has cited the deterioration of the market for initial public offerings as the reason for not renewing its agreement with HUGS | Photo credit: via Shutterstock
Panera Brands has put its IPO plans on hold after ending its partnership with hospitality investor USHG Acquisition Corp (HUGS), first announced in November 2021.
The coffee and food-to-go group, which operates over 2,100 Panera Bread cafés in the US alongside the Caribou Coffee and Einstein Bros. Bagels chains, said that unfavourable capital market conditions, particularly the deterioration of the market for initial public offerings over the past several months, was behind the decision to allow the agreement with USHG Acquisition Corp (HUGS) to expire on 30 June.
The partnership with the special purposes acquisition corporation (SPAC), sponsored by an affiliate of Union Square Hospitality Group, LLC, was cited at the time as an opportunity for Panera to pursue global growth.
HUGS chairman Danny Meyer said that it is unlikely that an initial public offering for Panera will happen ‘in the near-term’ and that he was ‘disappointed that market timing was not on our side’.
“We have tremendous respect for Danny Meyer, HUGS and its management team and have enjoyed a very collaborative relationship since last Fall. Unfortunately, the deterioration of capital market conditions over the last several months has led to the realisation that an IPO may not be imminent, and as a result we felt it was appropriate not to extend our planned partnership," said Niren Chaudhary, CEO, Panera Brands.
"However, we will continue to prepare for and explore an IPO as market conditions improve, and there is no change to our conviction in Panera, which is as strong as ever," he added.
Parent company JAB Holding took Panera Bread private in 2017 as part of its $7.5bn acquisition of the company.
In August 2021, JAB Holding created a new business unit, Panera Brands, comprising Panera Bread, Caribou Coffee and Einstein Bros. Bagels. There are currently 2,120 Panera Bread bakery-cafés in the US and Canada, 713 Caribou Coffee stores in 10 countries and more than 1,000 Einstein Bros. Bagels stores across the US.
In June 2020 another JAB Holding coffee company JDE Peet’s, the parent of US coffee chain Peet’s Coffee, raised $2.5bn with an IPO that valued the company at $17.3bn.