Krispy Kreme Weighs Sale of Insomnia Cookies

Krispy Kreme is considering an all-cash sale of Insomnia Cookies as it seeks to refocus efforts on its doughnut business.

Since Krispy Kreme bought a majority stake in Insomnia Cookies in 2018, the all-day and late-night cookie chain has expanded its presence in three countries with more than 250 bakeries. Krispy Kreme said Tuesday that the sale of Insomnia would allow it to focus on producing and selling fresh doughnuts.

“We acquired a majority stake in Insomnia Cookies to build our e-commerce and digital capability as well as assist Insomnia’s U.S. and International expansion,” Mike Tattersfield, chief executive of Krispy Kreme, said in a statement. “Both efforts have been successful and it’s time for the next strategic step for both companies.”

It was not disclosed how much of a stake Krispy Kreme held in Insomnia. Krispy Kreme also did not reveal how much it purchased Insomnia for in 2018.

According to Krispy Kreme, Insomnia’s revenue has tripled since 2017 and the cookie chain alone is expected to bring in $230 million this year. Insomnia opened 23 new shops in the second quarter of this year.

Krispy Kreme’s net revenue grew 9% year-over-year to $408.9 million in its second quarter, and total organic revenue grew 11.4%, the company reported in its quarterly report ended July 2. 

Krispy Kreme made its second initial public offering in July 2021 under the ticker DNUT. In 2016, Krispy Kreme delisted its stock in 2016 and went private following a $1.35 billion purchase from JAB Holding Company, a conglomerate with a variety of consumer goods brands like Panera Bread, Keurig and Peet’s.

The company's shares were up 2% early Tuesday afternoon.

The doughnut maker hired Evercore and Morgan Stanley & Co. to act as financial advisors, it said.

Insomnia Cookies was founded in 2003 by Seth Berkowitz, a student at the University of Pennsylvania at the time. Its first brick-and-mortar store opened in 2006.

“It has been an honor to partner with Krispy Kreme in an unprecedented chapter of growth for Insomnia Cookies,” Insomnia CEO Berkowitz said.