• by Karlene Lukovitz  @KLmarketdaily, April 5, 2017

Panera Bread, arguably the restaurant industry’s hottest brand, is poised to become an even more formidable competitor now that it’s being acquired by JAB, a German holding company that’s been snapping up major U.S. restaurant brands at an unprecedented pace.

Industry speculation about a Panera sale was confirmed today with the announcement that JAB will buy the company in a deal valued at $7.5 billion. Ron Shaich, founder and CEO of Panera and an early advocate for the “clean” food movement, will continue to run the company. 

The deal for Panera, which has about $5 billion in sales through more than 2,000 locations (half company-owned, half franchisee-owned) in the U.S. and Ontario, Canada, values the company at 19 times EBITDA, well above the industry norm, reports Bloomberg.

JAB now owns Krispy Kreme, the Einstein Noah Restaurant Group, and a collection of coffee brands, including Keurig Green Mountain, Caribou Coffee, Peet’s Coffee & Tea, and Stumptown Coffee Roasters. 

That portfolio, along with JAB’s declared commitment to Panera’s existing, clearly successful strategy, should result in even more accelerated growth for the 36-year-old Panera, which started life as Au Bon Pain. “We strongly support Panera’s vision for the future, strategic initiatives, culture of innovation, and balanced company versus franchise store mix,” confirmed JAB partner and CEO Olivier Goudet. 

“Over the last five years, we have developed and executed a powerful strategic plan to be a better competitive alternative with emerging runways for growth,” stated Shaich. “The themes we have bet on — digital, wellness, loyalty, omnichannel, new formats for growth — are shaping the restaurant industry today.” 

Panera has been the best-performing restaurant stock of the past 20 years — up 8,000%, according to Shaich. That growth is twice Starbucks’, four times Chipotle’s, and five times Buffalo Wild Wings’, he boasted in a recent Fortune interview.

As Fortune points out, JAB “will almost certainly” want to invest in Panera’s digital capabilities to further enhance customers’ experience. The launch of Panera 2.0 two years ago — including investments in ordering tech and kiosks to handle continued volume expansion of volume — has been a key contributor to the chain’s growth, but Panera is still considered behind Starbucks and Domino’s on the digital front.

With JAB as its parent, Panera could also move to start offering the Peet’s, Caribou or Stumptown coffee brands in its cafés, notes Bloomberg.

Pumped-up coffee offerings and faster service, combined with Panera’s brand promise of now offering “100% clean” food (and as of last week, a new line of clean drinks) could enable Panera to push a “one-stop” premium coffee-fix/healthy snacking positioning.

That would not be great news for fast-casual competitors, including struggling-for-a-comeback Chipotle. Even Starbucks, with global sales of $21 billion in 2016, is unlikely to underestimate Panera’s potential as a rival. In fact, Starbucks was reportedly the first to express interest in a possible acquisition of Panera, as a means of accelerating Starbucks' introduction of a broader food offering.