Keurig Green Mountain Inc (NASDAQ:GMCR), a personal beverage system company that has revolutionized the way consumers create and enjoy beverages, and JAB Holding Company (“JAB”) today announced that the companies have entered into a definitive merger agreement under which a JAB-led investor group will acquire Keurig Green Mountain for $92.00 per share in cash, or a total equity value of approximately $13.9 billion. The agreement, which has been unanimously approved by Keurig Green Mountain’s Board of Directors, represents a premium of approximately 77.9% over Keurig Green Mountain’s closing stock price on December 4, 2015.
JAB is acquiring Keurig Green Mountain in partnership with strategic minority investors who are already shareholders in Jacobs Douwe Egberts B.V., (“JDE”), including Mondelēz International and entities affiliated with BDT Capital Partners. At the close of the transaction, Keurig Green Mountain will be privately owned and will continue to be operated independently by the company’s management team and employees. Keurig Green Mountain will remain headquartered in Waterbury, VT.
Bart Becht, Chairman at JAB commented, “Keurig Green Mountain represents a major step forward in the creation of our global coffee platform. It is a fantastic company that uniquely brings together premium coffee brands and new beverage dispensing technologies like the famous Keurig single serve machine. 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.”
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. JAB fully supports Keurig Green Mountain’s culture and values as we continue to pursue our commitment to deliver innovative beverage solutions for consumers at the touch of a button.”
“The Coca-Cola Company is fully supportive of this transaction,” said Muhtar Kent, Chairman and CEO, The Coca-Cola Company. “We have enjoyed a strong partnership withKeurig Green Mountain, and will continue our collaboration with JAB in order to capitalize on the growth opportunities in the single-serve, pod-based segment of the cold beverage industry. We look forward to working with JAB, an experienced operator with a successful track record of investing in and growing consumer companies.”
Irene Rosenfeld, Chairman and CEO of Mondelēz International, commented, “Keurig Green Mountain is a strategic asset that provides immediate access to the U.S., the largest coffee market in the world, and to on-demand, the fastest growing segment of the market. By leveraging our existing investment in JDE and not contributing incremental capital, we have the opportunity to diversify our participation in the global coffee category, while continuing to invest in our core snacking business to deliver significant value for our shareholders over the long term.”
Transaction Details
The transaction is not subject to a financing condition and is expected to close during the first calendar quarter of 2016, subject to customary closing conditions, including receipt of regulatory approvals. The transaction requires the affirmative vote of holders of a majority of Keurig Green Mountain’s outstanding shares entitled to vote thereon.
BofA Merrill Lynch and Credit Suisse provided fairness opinions to Keurig Green Mountain. (Original Source)
Shares of Green Mountain Coffee are up 74.66% to $90.30 in pre-market trading. GMCR has a 1-year high of $141.69 and a 1-year low of $39.80. The stock’s 50-day moving average is $50.37 and its 200-day moving average is $62.49.
On the ratings front, Green Mountain Coffee Roasters has been the subject of a number of recent research reports. In a report issued on December 3, Wedbush analyst Philip Terpolilli maintained a Hold rating on GMCR, with a price target of $50, which represents a slight downside potential from current levels. Separately, on November 25, Susquehanna’s Pablo Zuanic maintained a Hold rating on the stock and has a price target of $46.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Philip Terpolilli and Pablo Zuanic have a total average return of -13.6% and -0.6% respectively. Terpolilli has a success rate of 5.6% and is ranked #3404 out of 3645 analysts, while Zuanic has a success rate of 52.3% and is ranked #2535.
Overall, one research analyst has rated the stock with a Sell rating, 8 research analysts have assigned a Hold rating and one research analyst has given a a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $64.50 which is 24.8% above where the stock closed last Friday.
Keurig Green Mountain Inc is engaged in the coffee and coffeemaker businesses in the United States and Canada. It sells Keurig Single Cup brewers and roast high-quality Arabica bean coffees.
