Panera Bread announces SPAC investment, will return to the public markets through an IPO

Panera Bread is preparing to go public again through an initial public offering.

The sandwich chain also announced Tuesday it has secured an investment from Danny Meyer’s special purpose acquisition company, USHG Acquisition Corp. Shares of the SPAC climbed 8% in premarket trading on the news.

Meyer said he plans to invest in Panera once it’s public personally and through his SPAC. Special purpose acquisition companies have no assets but can use the proceeds from an IPO, combined with bank financing, to buy and take privately held consumer companies public. The investment in Panera is an unusual deal for a SPAC, which will exchange its shares for the sandwich chain’s stock and survive the merger with Panera’s subsidiary Rye Merger, according to regulatory filings.

SPAC investors can pull their money out of the deal before it’s done, so Panera’s current owner JAB Holding has agreed to invest more to offset redemptions. Once the deal is completed, Meyer will become lead independent director of Panera’s board.

Panera went private in 2017 after JAB Holding bought the company for $7.5 billion. As a privately held company, the chain has kept investing in technology, boosting its digital sales. Earlier this year Panera unveiled a new restaurant design inspired by the pandemic’s changes to consumer behavior.

Panera’s upcoming IPO is the latest in a string of changes of JAB’s portfolio this year. The company, which is the investment arm of the Reimann family, sold Au Bon Pain to a Yum Brands franchisee earlier this year. Under JAB’s ownership, many Au Bon Pain locations were converted into Panera restaurants, shrinking its footprint from roughly 300 locations to 171. Then, in July, Krispy Kreme went public again after being owned by JAB since 2016.

While Panera prepares to file its paperwork with the Securities and Exchange Commission, a number of other restaurant companies have also opted to join the public markets this year, including First Watch Restaurant Group and coffee chain Dutch Bros.