Panera, SPAC pull partnership

ST. LOUIS — Panera Brands, Inc. announced earlier this month that a partnership with USHG Acquisition Corp. (HUGS) will not be extended.

HUGS, a special purpose acquisition company (SPAC) sponsored by an affiliate of Union Square Hospitality Group LLC, signed an agreement in November 2021 under which HUGS was to become a cornerstone partner of Panera Brands.

As part of the agreement, Danny Meyer, chairman of HUGS and founder of Union Square Hospitality Group, was expected to invest directly in Panera Brands and become the lead independent director on Panera Brands’ board of directors.

However, the partnership was terminated on June 30 “due to deteriorating capital market conditions,” the companies said.

“Based on current capital market conditions, it is unlikely that an initial public offering for Panera will occur in the near future, and therefore we have agreed not to extend our partnership beyond the existing expiration date of June 30,” Mr. Mayer said. “We are disappointed that market timing was not on our side, especially since we have tremendous admiration and respect for Panera, its entire management team and their partners at JAB.”

“HUGS will now focus on seeking another partner that embodies the values ​​consistent with HUGS and our Enlightened Hospitality roots, demonstrating that shareholder success is dependent on and driven by an employee-first culture.”

Panera Brands, which consists of the Panera Bread, Caribou Coffee and Einstein Bros. brands, was created in early August 2021. Panera Bread was publicly traded on the Nasdaq before JAB Holding Co. to acquire it for $315 per share, or about $7.5 billion, in 2017.

The company said it will continue to prepare and evaluate a potential public listing if market conditions improve.

“We have tremendous respect for Danny Meyer, HUGS and his management team and have enjoyed a great deal of collaboration since last fall,” said Niren Chaudhary, CEO of Panera Brands. “Unfortunately, the deterioration of capital market conditions over the past few months has led to the realization that an IPO may not be imminent, and as a result we have deemed it appropriate not to extend our planned partnership.” However, we will continue to prepare for and explore the IPO as market conditions improve and there is no change in our belief in Panera, which is as strong as ever. It has been a great pleasure working with Danny and the HUGS team and we wish them all the best.”

Nearly 4,000 locations in 10 countries make up the Panera brands. As of June 30, there were 2,120 Panera Bread bakery-cafes in 48 US states and Ontario operating under the Panera Bread or St. Louis Bread Co. Caribou Coffee operates 713 Caribou Coffee stores in 10 countries. The Einstein Bros. brands, which consist of Einstein Bros Bagels, Bruegger’s Bagels, Noah’s New York Bagels and Manhattan Bagels, operate more than 1,000 company-owned and licensed locations in the United States.