Stage is set for accelerated domestic
growth and increased profitability
The true story of Krispy
Kreme is not what has been
accomplished and “where we
are” …. it is the multiple
opportunities to grow that
have yet to be exploited and,
through them, “where we are
going.” It is “quite simply” a
story of long term growth
- - - - - -
Don't know what other people think...
But that summary above sounds exactly like something a Big Player / Private Equity Group would desire to grab. BRAND. BRAND. BRAND.
Still think the "poison pill" Tax Asset Protection Plan is there just to protect them from low ball offers.
You can bet if the RIGHT offer came along with the RIGHT premium - they would accept it.
Would guess $16 to $17 is the absolute LOWEST possible acquisition price with maybe $20'ish being a high guesstime for the near term (next 6 months).
Brand doesn't mean anything if people aren't buying the product, they need to become a daily morning destination like Dunkin for coffee that's where the easy money is, they can only do that with a great footprint. There's KKD shops in southern California but they are 10 miles any which way you live. If there was one locally I would frequent it more often. Hopefully they can make economic sense for the franchisees, there doesn't have to be a palace, See's candies are only 6 or 700 square feet and they make gobs of money. Put some food on the menu like Hortons, top quality like the donuts , twice the business. Put sandwich case in and see what happens, run a couple of test shops in some high traffic business districts.
Reasonable assumption based upon the POTENTIAL for KKD intermediate and long term. They have really RE-BUILT this company over the last 3 years to a point where they are really JUST beginning to hit on all cylinders.
KKD Board and Management most likely know that if they execute this valuable BRAND will be a much LARGER BRAND in 3-5 years.
As far as take over potential - they have positioned themselves now to be a VERY attractive target. Well run...profitable...accelerating growth...great system and controls...strong management...
An acquirer has to look at the ROI and see that in 5 years an acquisition NOW would look mighty smart. The KKD Board and Management must look at the potential for $35 to $45 share price in 2-4 years as you state above and then figure out what a reasonable discount to the present it is worth today.