The cupcake craze is getting crazier.
Crumbs Bake Shop, the country’s largest cupcake chain, will go public through a $66 million merger with an investment company, the 57th Street General Acquisition Corporation.
The deal, which is expected to be announced on Monday, gives Crumbs the money to execute its ambitious expansion plans...
Last year, Crumbs posted an estimated $31 million in revenue and generated $2.5 million in earnings before interest, taxes, depreciation and amortization. That translates into about 13 million cupcakes sold, Mr. Bauer said.
The investment company will pay Crumbs $27 million in cash and $39 million in stock. Crumbs owners also stand to receive an additional $44 million in stock depending on the company’s future stock performance and earnings. The deal is expected to close next month, resulting in Crumbs shares’ being listed on a major exchange.
The Bauers will retain a substantial stake in the business and continue to run the company. Edwin Lewis, a well-known former fashion executive who acquired 50 percent of Crumbs for $10 million in 2008, will remain on the company’s board.
See Crumbs.com for information on all their locations. Their latest bakery opened in Chicago this weekend, and other recent Crumbs openings include Greenwich, Connecticut and Clarendon, Virginia.
At our cupcake meetup today, Nichelle and I were just discussing the expansion of cupcake bakeries, with Sprinkles set to open in New York in April, Magnolia Bakery and BabyCakes in Los Angeles, Molly's Cupcakes coming to New York, etc. It will be interesting to see how far and wide cupcake bakeries, the big names and the smaller ones, spread. What do you think?
Sunday, January 09, 2011