Europe’s next big IPO is a €1.5-billion Spanish family business that makes the bread for Starbucks and Pret A Manger

Not many companies can boast about reaching a billion-dollar valuation entirely built on bread, donuts and pastries—but Spain’s Europastry certainly can.

The company, which supplies its baked goods to Starbucks, Pret A Manger, and Dunkin’ Donuts, is set to launch its IPO later this week.

The listing would value the company at €1.5 billion, marking a key milestone for Europastry, whose roots go back over 150 years.

The Gallés family behind the international bread supplier will also make a killing from the IPO, earning at least €825 million according to Bloomberg. Depending on how successful the public listing is, the dynasty that’s controlled the business for three generations could become Spain’s first baking billionaire family.

Europastry had a net turnover of €1.3 billion last year, driven by global expansion, deals and constant innovation in the baking industry. It acquired a Dutch frozen breads company earlier this year to further cement its position among baked goods suppliers.

Last month, it reported a year-over-year increase in second-quarter earnings, placing it in an “excellent position” for the future, Europastry’s executive president Jordi Gallés said at the time.

Europastry’s bread and butter

The Gallés family’s baking stronghold predates its identity as Europastry.

It started off as a small bakery in a little town just outside Barcelona in 1862. About a century later, Pere Gallés launched a bakery chain experimenting with frozen pre-baked bread. The trick of baking bread to about 80% of being fully done has been attributed to the company’s success today.

It was only in 1987 that the business took the Europastry name and began distributing bread and baked goods worldwide.

It scored some high-profile deals that propelled it to success, such as supplying bread to Barcelona’s 1992 Olympics and anchoring Starbucks’ Spain expansion.

Europastry’s strategy in recent times has involved pumping investments into research and development to break ground on new recipes and products that resonate with ever-changing food fads. It added over 400 new products to its portfolio last year and has established itself as a more technology-oriented company than one would expect of a traditional baking business.

Its business is significantly bigger in Europe with sales worth $1.1 billion, than in other parts of the world (sales of $325 million), according to Europastry’s latest annual report.

Delivering on the IPO promise

This won’t be Europastry’s first attempt at a public listing—it tried the same in 2007, 2019 and again, in 2023.

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But this time around, as the company looks to simultaneously list across stock exchanges in Barcelona, Madrid, Bilbao and Valencia, things could be different.

Spain has had other blockbuster IPOs in recent memory, including that of cosmetics giant Puig earlier this year.

The proceeds Europastry raises from the IPO will be used to reduce the company’s debt and continue its investments through mergers and acquisitions, a spokesperson for the company told Fortune. 

Jordi Gallés, the grandson of Pere Gallés and the only family member with a management role at Europastry now, is set to hold on to his controlling stake of 62.2% following the listing.

The company has had remarkably steady growth over the last decade—barring the pandemic year. However, it will still have to prove to investors how it will sustain its growth through croissants, bread loaves, and pizza dough.

This story was originally featured on Fortune.com