Pret A Manger swallowed by German investment firm for £1.5bn

Bridgepoint Capital has agreed to sell Pret A Manger to the German investor that owns Krispy Kreme donuts and Douwe Egberts coffee in a deal said to value the sandwich chain at more than £1.5bn.

The UK private equity firm is selling Pret to JAB Holdings after a decade of ownership of owning the chain, which has expanded in Britain, where its operations focus on London, the US, China and France.

JAB, chaired by Bart Becht, the former chief executive of Reckitt Benckiser, is an investment vehicle for Germany’s reclusive multi-billionaire Reimann family. It has been building up investments in businesses selling coffee and other beverages while selling stakes in luxury goods brands such as Bally and Jimmy Choo.

Pret was founded in 1986 by the entrepreneur Julian Metcalfe with a single shop in London’s Victoria selling sandwiches made each day on the premises – one of Pret’s key selling points. McDonald’s bought a stake in 2001 which it sold to Bridgepoint in 2008.

The chain’s sandwiches, salads and coffee have become staples for busy city workers buying breakfast and lunch. Clive Schlee, Pret’s CEO, said it had a ninth straight year of rising like-for-like sales in 2017.

Olivier Goudet, JAB’s CEO, said: "Pret’s management's proven track record and commitment to customer service, investment in innovation and approach to freshly prepared food position Pret well as it capitalises on evolving consumer taste and lifestyle preferences. We look forward to working with Clive Schlee and his management team, while promoting the Pret brand and supporting Pret's impressive culture for the next phase in the company's growth with JAB."

Pret has 530 shops worldwide generating £879m of annual revenue. Its reported £1.5bn price tag includes debt, marking a large return for Bridgepoint, which paid £364m including debt when it bought the chain. Bridgepoint had been considering floating Pret in New York, where it opened its first non-UK stores in 2001, before deciding to sell to JAB.

JAB’s focus on the coffee market, via is US Keurig Green Mountain coffee business, has turned it into the main challenger to market leader Nestle. It took control of Dr Pepper Snapple in January for $18.7bn in cash.