Doughnut retailer Krispy Kreme UK has undergone a management buy-out worth £25 million, with private equity firm Alcuin Capital Partners taking a bite out of the business.
Doughnut retailer Krispy Kreme UK has undergone a management buy-out worth £25 million, with private equity firm Alcuin Capital Partners taking a bite out of the business.
The business was founded in the US in 1937 and entered the UK market in October 2003 with a shop in London. Since then its presence has extended to 45 stores, and 350 cabinets in retailers such as Tesco.
Richard Cheshire, joint managing director of Krispy Kreme UK, comments: ‘Krispy Kreme has expanded rapidly in the UK since we launched in 2003, and our current business plan aims to build on this growth.
‘With the support of Alcuin, we plan to achieve this by focusing on our core business of making […] doughnuts and coffee and geographically expanding our retail and wholesale operations.’
Under the terms of the MBO, the existing management team is to gain a ‘significantly increased’ equity stake in the business. The deal also allows for the company’s original investors, Chesire and Kent, to achieve a return on its initial investment which saw the doughnut business launch in the UK eight years ago.
Alcuin has appointed partner Mark Storey to the board of Krispy Kreme UK as director.
Following the MBO, Krispy Kreme UK aims to have 80 shops and more than 400 branded cabinets employing 1,500 people by 2015.
Rob Hunt, joint managing director of Krispy Kreme UK, says that Alcuin is an ‘ideal partner’ for the confectioner given its history of backing UK companies such as Caffe Nero. Hunt believes that Alcuin has ‘substantial expertise’ in supporting rapidly growing businesses.
The MBO is set to allow the business to continue to develop its ‘hub and spoke’ distribution model, which combines its Hotlight stores aimed at displaying its fresh doughnut production, with its town centre coffee bars and cabinets.
Krispy Kreme was advised on the MBO by Latimer Corporation, Shoosmiths and PwC. Macfarlanes provided legal advice to the vendors. Alcuin was advised by Tenon and Jones Day.
