But in a statement, Panera founder, chairman and CEO, Ron Shaich, said he believes the transaction with the European investment company offered the best way forward.
“We are pleased to join with JAB, a private investor with an equally long-term perspective, as well as a deep commitment to our strategic plan,” he said.
JAB, owned by Austria’s Reichman family, will add Panera to its growing stable of brands, including the Krispy Kreme Doughnut chain, and coffee brands Peet’s Coffee & Tea, Caribou Coffee, Stumptown Coffee and Keurig Green Mountain.
JAB will pay $315 per Panera Bread share, 14.5% higher than the company’s closing price of $274 on April 4.
The transaction, which includes approximately $340m of debt, is expected to be finalized in the third quarter of 2017, following Panera shareholders’ and regulatory approval.
Once concluded, Panera will become a privately-held company but will continue to operate independently by Panera’s management team.
Panera started with one 400 square foot cookie store in Boston in the early 1980s and has grown into a 2,000 bakery-café system with an annual sales revenue of approximately $5bn and more than 100,000 associates, said Shaich.
It is as yet unclear how and if the deal will impact franchisees.
Comparable increase in sales in Q1 2017
During the announcement, the company also pre-released its Q1 2017 results, reporting a 5.3% increase of net bakery-café sales compared to the same period a year prior.
Panera reported $2.8bn in revenue for 2016, up from $2.68bn in 2015.
Saturation of fast casual concept
According to Stephen Dutton, consumer foodservice analyst at Euromonitor, Panera has been growing in the US for years, with a modern, fast casual format and health-oriented brand positioning.
However, while the fast casual concept has enjoyed rapid growth in the US, this is expected to slow as the market becomes saturated.
Dutton said Panera likely believes now is the right time to sell to a global operator in order to tap into its influence and resources to assist in continued growth.