Coffee giant and company known for popularizing its instant flavor pods, Keurig, is reportedly being bought out for $13.9 billion by an investment group led by private-equity firm JAB Holding Co. The deal is an all-cash offer of $92 per share, a 78% premium to Keurig’s 72.32% trading price on Friday, and was unanimously approved by the board.
"Keurig Green Mountain represents a major step forward in the creation of our global coffee platform," JAB Chairman Bart Becht said in a statement. "It is a fantastic company that uniquely brings together premium coffee brands and new beverage dispensing technologies like the famous Keurig single serve machine."
Sales from Keurig have been down, according to USA today, and the company has responding by cutting 5% of its total workforce and introducing new products to offset its shortcomings in other areas. JAB has said that it will continue to operate Keurig as an independent, private subsidiary based in Waterbury, Vermont.
This may not be the last beverage company you’ll see JAB eyeing in the coming days either. Susquehanna Financial Group analyst Pablo Zaunic said in a conference call Monday that he believes the Keurig purchase is part of JAB’s bigger, global strategy to "consolidate coffee in Europe and the United States" by becoming a major global player.
JAB’s current portfolio of U.S. and international coffee brands already includes Peet’s Coffee & Tea (bought for $974 million in 2012) and Caribou Coffee Company (acquired for $340 million, also in 2012), Espresso House (the largest branded coffee shop chain in Scandinavia), Baresso Coffee (the first and largest branded coffee shop chain in Denmark), and Netherlands-based Douwe Egberts.
JAB’s Peet’s brand has also been consolidating, buying Mighty Leaf Tea, Stumptown Coffee Roasters, and Intelligentsia, with plans to continue to operate those brands separately and independently.
Next on JAB’s takeover agenda? Fortune magazine suggests SodaStream, whose shares also jumped following Keurig’s news. Investors believe that SodaStream is a near equivalent to Keurig, and see them as a logical next target for an acquisition.
For more on the future of JAB and Keurig, stay tuned to DeliMarket News.
