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British sandwich and coffee shop chain Pret A Manger was sold for $2 billion on Tuesday to an investment fund of Germany's billionaire Reimann family, as part of a global acquisition spree aimed at challenging Nestle in the coffee sector.
The sale values Pret at more than 1.5 billion pounds ($2 billion) including debt and gives Pret founders Julian Metcalfe and Sinclair Beecham a final exit from their remaining investment in the chain they founded 32 years ago.
It also gives a windfall to Pret's 12,000 staff as Chief Executive Clive Schlee said via Twitter they would each get a 1,000-pound bonus once the deal completes.
Pret, whose organic coffee and upmarket sandwiches such as crayfish and rocket proved popular enough to propel its growth from a single shop in London to a 530-strong global chain, generated revenue of 879 million pounds last year.
For Luxembourg-based purchaser JAB Holdings, the acquisition of a majority stake in Pret from private-equity firm Bridgepoint and other minority investors is the latest in a multibillion-dollar series of takeovers designed to expand its coffee and beverage empire.
JAB has already bought Keurig Green Mountain and Peets Coffee & Tea, and Keurig subsequently struck a deal worth more than $21 billion to combine with soda maker Dr Pepper Snapple.
JAB, whose owners the publicity-shy Reimann family are descended from Ludwig Reimann, a chemist who in the 19th century joined the chemicals business founded by Johann Adam Benckiser and married into Benckisers family, has also made a string of deals including for bakery chains Au Bon Pain and Panera Bread, as well as Krispy Kreme.
Bridgepoint bought a majority stake in Pret a decade ago for about 345 million pounds and had been examining an exit via a New York stock market listing before opting to sell to JAB.
The sale price represents a multiple of 15 times Pret's 2017 earnings before interest, taxes, depreciation, and amortization of more than 100 million pounds, according to a person with knowledge of the matter.
"Management's proven track record and commitment to customer service, investment in innovation, and approach to freshly prepared food position Pret well as it capitalizes on evolving consumer taste and lifestyle preferences," said JAB Chief Executive Olivier Goudet.
The sale to the Reimann family's firm was first reported by the Financial Times.
The Pret sale comes a month after Whitbread said it would demerge its Costa coffee chain within two years, a lengthy timeframe that stoked speculation Costa may attract a bidder which some bankers speculated could be JAB.
JP Morgan advised Bridgepoint on the Pret deal, while JAB worked with HSBC.