The name Krispy Kreme might conjure up some conflicting emotions for Australians. It’s the doughnut that people love to hate, or perhaps hate to love. Or just love. Or just hate.
Well, perhaps we will all get the opportunity to put our money where our mouths are (or aren’t) very soon. According to a report from CNBC, the double-K might be considering an initial public offering (IPO) in 2021.
According to the report, Krispy Kreme’s owner, the private company JAB Holding, is looking to raise between US$560 million and US$640 million in a public float in 2021. JAB took Krispy Kreme private back in 2016 when it bought the business for US$1.35 billion.
The company is reportedly eyeing a listing price of between $21 and $24 per share. That range would give Krispy Kreme an implied valuation of between US$3.46 billion and US$3.96 billion. JAB is eyeing a (very fitting) ticker code of ‘DNUT’ on the Nasdaq exchange.
CNBC tells us that Krispy Kreme’s revenue rose 17% in the 2020 American fiscal year to $US1.12 billion. However, it also reported a net loss of US$60.9 million.
Krispy Kreme has also given its investors net losses for the last three fiscal years. This was apparently due to heavy investment expenses at the company, such as a US$10.3 million, 24-hour flagship store in New York’s famous Times Square.
In a US Securities and Exchange Commission (SEC) filing, the company stated it intends to use the proceeds from its IPO to repay debts, repurchase shares of stock from some of its executives, and make payments on tax withholdings, among other general corporate expenses.
A hot year for IPOs
If Krispy Kreme were to IPO in 2021, it would be the latest in what has been a blockbuster year of listings.
The US has seen big names like Coinbase Global Inc (NASDAQ: COIN), Roblox Corp (NYSE: RBLX) and Squarespace Inc (NYSE: SQSP) undertake public floats. The ASX has also seen some big IPOs this year, such as Airtasker Ltd (ASX: ART).
It will be interesting to see how a Krispy Kreme IPO plays out if it ends up joining this list.
The post Sweet IPO! Will Krispy Kreme become a public company? appeared first on The Motley Fool Australia.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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