US-based doughnut chain Krispy Kreme has sold its majority ownership stake in Insomnia Cookies to investment companies Verlinvest and Mistral Equity Partners.

The deal values the late-night bakery concept at a total enterprise value of $350m.

This is double the valuation when Krispy Kreme acquired the brand in 2018.

The transaction, which closed in July 2024, saw Krispy Kreme receive $127.4m with an additional $45m expected following Insomnia Cookies' refinancing of intercompany debt.

The move follows Krispy Kreme’s announcement in 2023 of its intention to explore strategic alternatives for Insomnia Cookies, including the possibility of an all-cash sale.

Krispy Kreme will use the proceeds to bolster its fresh doughnut business, enhance availability and reduce debt.

Krispy Kreme president and CEO Josh Charlesworth said: “As we build a bigger and better Krispy Kreme, this transaction allows us to focus on our core strategy of producing, selling and distributing fresh doughnuts daily while also further strengthening our balance sheet.”

Krispy Kreme retains a 34% minority stake in Insomnia Cookies.

Financial advisory roles in the transaction were undertaken by Evercore and Morgan Stanley & Co LLC.

Insomnia Cookies has 250 locations worldwide. The bakery offers a variety of ice cream, cookies and sweet treats.

In the first half of 2024, Insomnia Cookies introduced Insomnia Rewards, a new customer loyalty programme aimed at improving the consumer experience and boosting engagement at its stores in the US and Canada.