Keurig Green Mountain Inc, the maker of K-Cup single-serve coffee pods, said it would be bought by an investor group led by Germany’s JAB Holding Co (JAB) for about $13.9 billion.
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Brian Kelley, President and CEO of Keurig Green Mountain commented, “This transaction will deliver significant cash value for our shareholders and offers an exciting new chapter for our customers, partners and employees by combining Keurig Green Mountain with JAB’s global coffee platform”.
Furthermore, Keurig Green Mountain Incorporated exhibits capitalization for its shares on the stock market of 7.70B.
As of October 21, those holding short positions included David Einhorn’s Greenlight Capital.
The acquisition was approved unanimously by Keurig’s board, including its largest stakeholder Coca-Cola, which owns 17.4 per cent, Keurig said in a statement. Coke’s shares were little changed. Vetr raised Keurig Green Mountain from a “buy” rating to a “strong-buy” rating and set a $60.20 target price on the stock in a research report on Monday, September 28th.
“It’s a demanding valuation”, said Vontobel analyst Jean-Philippe Bertschy, who estimates the deal price represents a multiple of about 15 times EBITDA. “Keurig Green Mountain will operate as an independent entity to ensure it will further build on its coffee & technology strength and continue to serve all its partners to the best of its abilities”.
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Waterbury, VT-based Keurig Green Mountain manufactures personal beverage systems for hot and cold drinks and also produces the coffee, tea and soda pods used in the machines. Through Friday, the stock had tumbled 61% year to date, while the S&P 500 had gained 1.6%.
In addition to JAB, Keurig is being acquired by minority investors that include Cadbury owner Mondelez International. Outside of coffee beans, JAB Holding has a controlling stake of beauty company Coty and high-end shoe seller Jimmy Choo.
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Keurig Green Mountain (NASDAQ:GMCR) traded down 4.79% during trading on Friday, hitting $51.70. “For first quarter shipments for us, I’d say, we’re very confident that we should see a higher retail sales for brewers compared to the prior year”, said Peter Leemputte, Keurig’s chief financial officer.
