Krispy Kreme Buys Bakery Chain for $40 Million, Plans to Develop Bakery-Cafe Concept

NEW YORK - Krispy Kreme Doughnuts Inc. said on Friday it plans to buy Montana Mills Co. Inc., a 30-store bakery chain, for roughly $40 million in stock in its first move to expand beyond its namesake chain.

Winston-Salem, N.C.-based Krispy Kreme said the acquisition would provide the basis for a bakery-cafe concept, which it thinks has "significant leverage."

Rochester, N.Y.-based Montana Mills is known for its high-quality, healthy breads. The company uses stone-ground flour to make bread from scratch in open-air bakeries in front of customers.

Krispy Kreme said it plans to spend about two years to develop its new concept.

Analysts note that such a concept is a smart move for Krispy Kreme, as healthy bread may have more growth potential than doughnuts with today's health-conscious consumers.
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