Case Detail

Case Summary

The Panera Bread LBO

Case Number: 5-219-250, Year Published: 2019, Revision Date: November 12, 2019

HBS Number: KE1153

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Authors: David Stowell; Alexander Katz

Key Concepts

cash flow analysis, corporate strategy, financial analysis, financial statements, financial strategy, mergers and acquisitions, private equity, shareholder value added, strategic planning, valuation


This case considers the buyout of Panera Bread from the perspective of a private equity fund. In early 2017, KLG Managing Director Tom Denning is considering a leveraged buyout of Panera Bread, a rapidly growing fast-casual restaurant company. A surprising Bloomberg News story signals that the deal process is broadening and KLG will have to act quickly if it hopes to buy Panera Bread. Students assume the role of Tom Denning as he prepares an investment recommendation for KLG's investment committee. In doing so, students are required to consider a very large and expensive investment. Students are challenged to create an investment recommendation by performing due diligence, determining additional questions to ask, and pricing a buyout bid that incorporates an optimal capital structure and meets KLG's return requirements. The Panera Bread case is designed to give students insight into the private equity investment process.

Learning Objectives

After reading and analyzing the case, students will be able to understand how to evaluate an investment opportunity by gathering information, analyzing risks, and identifying opportunities;determine what additional information is needed to make a good investment decision; develop a viable exit strategy (including interim strategic decisions); and make an investment recommendation supported by a compelling rationale.

Number of Pages: 30

Extended Case Information

Teaching Areas: Finance

Teaching Note Available: Yes

Geographic: United States

Industry: Fast casual restaurants

Organization Name: Panera Bread

Organization Department: Private equity investments

Organization Size: Large

Decision Maker Position: Managing director

Decision Maker Gender: Male