Keurig Green Mountain Inc. will be acquired by a JAB Holding Co.-led investor group for about US$13.9 billion in cash, bringing a massive windfall to shareholders after a year of watching the stock get battered.
Following the buyout, Keurig will be privately owned and independently operated, according to a statement Monday. The board of the Waterbury, Vermont-based company unanimously approved the deal, which is expected to close during the first quarter of 2016. The purchase price of US$92 a share represents a 78 per cent premium to Keurig’s closing price on Friday.
“Keurig Green Mountain will operate as an independent entity to ensure it will further build on its coffee and technology strength,” Bart Becht, JAB’s chairman, said in the statement. The company’s management team, which is currently led by chief executive Brian Kelley, will continue to run Keurig.
The deal provides a bounty to investors after Keurig’s dimmer prospects weighed on the stock this year. The company has suffered from waning sales of its K-Cup containers and lower prices on brewers. And a new cold brewer is rolling out more slowly than expected. The strong dollar also is hampering international sales.
Keurig shares had been down 61 per cent this year through the end of last week. They jumped 75 per cent to US$90.24 in early trading after the buyout was announced.
The plan to go private follows a dramatic rise and fall for Keurig, a pioneer of single-serve coffee brewers. The surging popularity of its device, which allowed consumers to brew one cup of java at a time, sent sales and profit soaring in the past decade. In February 2014, Coca-Cola Co. agreed to buy a 10 per cent stake in the company, betting that Keurig could repeat its success with a cold-beverage maker.