Krispy Kreme plans to divest its bakery business, Insomnia Cookies, in an all-cash transaction to focus on its core doughnut business.

Known for serving warm cookies, Insomnia Cookies is currently present in three countries and operates more than 250 bakery outlets.

Krispy Kreme CEO Mike Tattersfield said: “We acquired a majority stake in Insomnia Cookies to build our e-commerce and digital capability as well as assist Insomnia’s US and International expansion. Both efforts have been successful and it’s time for the next strategic step for both companies.

“Krispy Kreme has expanded rapidly through our capital-light omnichannel model and the brand is now in 37 countries selling fresh doughnuts through nearly 13,000 points of access daily.

“Looking ahead, our goal is to expand to more than 75,000 points both by entering 3-5 new countries each year and developing new channels like quick service restaurants.”

In 2018, Krispy Kreme acquired a significant stake in Insomnia Cookies and estimates that the business could generate around $230m in fiscal year 2023.

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By divesting its bakery chain, Krispy Kreme aims to unlock shareholder value and shift focus mainly towards its doughnut business.

Insomnia Cookies founder and CEO Seth Berkowitz said: “It has been an honour to partner with Krispy Kreme in an unprecedented chapter of growth.

“As we enter our 20th year of delivering warm, delicious cookies, we are now a sizeable multi-channel enterprise but still have a huge runway ahead in the attractive $700bn indulgence industry, and I look forward to leading our Insomniacs in our next phase of significant domestic and global expansion.”

For this divesture, Krispy Kreme appointed Evercore and Morgan Stanley & Co as financial advisors.