Panera Brands To Go Public Through Deal With USHG Acquisition (HUGS)

By Amit Chowdhry ● Nov 9, 2021
  • Panera Brands and USHG Acquisition Corp. (NYSE:HUGS) announced a deal through which HUGS will become a cornerstone partner with Panera Brands as the fast-casual brand will be going public.

Panera Brands – which includes the iconic fast-casual and hospitality brand Panera Bread as well as Caribou Coffee and Einstein Bros. Bagels – and USHG Acquisition Corp. (NYSE:HUGS) (HUGS), a company sponsored by an affiliate of Union Square Hospitality Group, LLC (one of the world’s leading hospitality businesses) announced today that they have signed an agreement through which HUGS will become a cornerstone partner with Panera Brands. And Danny Meyer will also invest directly in Panera Brands at the time of the previously announced Panera Brands IPO and become a Lead Independent Director of Panera Brands’ board following completion of the IPO.

The closing of the deal will take place following the completion of the Panera Brands IPO, which will be undertaken via a customary IPO process, and approval of HUGS shareholders. And pursuant to the deal, HUGS shareholders will become direct shareholders in Panera Brands, alongside current and future shareholders of Panera Brands after the Panera Brands IPO. JAB – which is Panera Brands’ primary shareholder – subject to completion of the Panera Brands IPO, has agreed to make a dollar-for-dollar investment in shares of Panera common stock in an amount equal to the amount of any redemptions of HUGS shares.

Details About The Deal

Panera Brands and HUGS entered into a definitive agreement in connection with the deal pursuant to which a newly formed wholly owned subsidiary of Panera Brands will merge with and into HUGS. As a result of the merger:

1.) Each issued and outstanding share of HUGS’s Class A and Class B common stock will be exchanged for a number of shares of Panera Brands’ common stock at an exchange ratio of $10.00 divided by the public offering price per share in the Panera Brands IPO.

2.) Each issued and outstanding warrant of HUGS will be assumed by Panera Brands and will become a warrant with respect to Panera Brands common stock, with the number of shares of Panera Brands common stock underlying each warrant adjusted based on the public offering price per share in the Panera Brands IPO in accordance with the terms of the Transaction.

3.) HUGS will become a wholly owned subsidiary of Panera Brands and Panera Brands will succeed to all of the cash of HUGS, net of closing costs and HUGS shareholder redemptions (which redemptions will be offset, dollar-for-dollar, subject to completion of the Panera Brands IPO, by an investment in shares of Panera Brands common stock by JAB at the public offering price per share in the Panera Brands IPO, as described above).

4.) Closing of the Transaction is subject to completion of the Panera Brands IPO, the requisite HUGS shareholder approval and the satisfaction of other customary conditions.

KEY QUOTES:

“Under CEO Niren Chaudhary’s leadership, Panera Brands embodies values consistent with HUGS and our Enlightened Hospitality roots, demonstrating that shareholder success is dependent on and driven by an employee-first stakeholder culture. Importantly, Panera Brands meets our investment criteria to combine with a purpose-driven business that is scalable and built for the long-term; a market leader whose greatest strength is its talent and heart; a company where people love to work and with which customers, suppliers and partners love doing business. We are excited to partner with Panera Brands alongside JAB.”

— Danny Meyer, Chairman of HUGS and founder of Union Square Hospitality Group

“We’ve long admired Danny’s work as he built some of today’s most beloved brands with a relentless focus on hospitality and culture. The values of Panera Brands, which are based on a belief that we can be force multipliers for good, creating a positive impact on our communities and the planet, are values shared with Union Square Hospitality Group. We look forward to partnering to capitalize on the global growth opportunity for our brands.”

— Niren Chaudhary, Chief Executive Officer of Panera Brands

“We are excited to have Danny Meyer and HUGS as key partners with Panera Brands and for Danny to join Niren and the team as an active participant in its long-term success alongside Panera Brands shareholders. This transaction unites two of the world’s leading hospitality organizations to work together on a successful transaction.”

— David Bell, Senior Partner at JAB

“We went public with a focus on finding a category-leading business that embraces ‘Enlightened Hospitality’, including attracting and retaining the best talent by putting employees first, creating deep and emotional connections with customers and community, and being mindful of all stakeholders. We believe we found the ideal fit in Panera Brands.”

— Adam Sokoloff, Chief Executive Officer of HUGS

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