Krispy Kreme is exploring strategic alternatives, including an all-cash sale, of its majority stake in Insomnia Cookies, the company said Tuesday.
The decision is part of an effort to focus more on its core doughnut business, the company said.
Krispy Kreme acquired control of Insomnia Cookies in 2018 in a deal backed by European investment firm JAB Holding. The deal valued Insomnia Cookies at less than $500 million, sources told CNBC at the time.
"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," said Krispy Kreme CEO Mike Tattersfield in a statement. "Both efforts have been successful and it's time for the next strategic step for both companies."
Krispy Kreme went public for the second time in 2021, at an implied valuation of $2.7 billion. The doughnut chain first went public in 2000 but was taken private in a sale to JAB Holding in 2016.
Insomnia Cookies, which is known for serving cookies well into the early morning hours, has tripled its revenue since 2017, Krispy Kreme said Tuesday. The cookie chain has expanded from more than 135 locations in 2018 to 250 locations today.
The cookie chain was founded in 2003 by University of Pennsylvania student Seth Berkowitz, who is CEO of Insomnia Cookies. The bakeries are often found near college campuses to feed the cravings of students staying up late into the night.
"It has been an honor to partner with Krispy Kreme in an unprecedented chapter of growth for Insomnia Cookies," Berkowitz said in a statement.