JAB Holding to pay total of $13.9 billion,also controls Peet's and Caribou coffee companies
by Timothy McQuiston Vermont Business Magazine 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 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 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 percent over Keurig Green Mountain's closing stock price on December 4, 2015. Keurig Green Mountain will remain headquartered in Waterbury. Governor Peter Shumlin said that Keurig has told him that there are no plans for a reduction in workforce as a result of the acquisition. The deal is expected to close in the first quarter of 2016.
Keurig is Vermont's largest company. In August it laid off about 200 workers here as part of a company-wide reduction of 330 workers in North America. Keurig reported to Vermont Business Magazine that it has approximately 2,000 employees in Vermont now and about 6,000 total worldwide. Keurig's stock price, which peaked at $157.10 in November 2014, had slumped and bottomed out at $40.13 last month before recovering modestly. Sluggish sales of coffee brewers and uncertainty of the success of the new Keurig Kold dampened enthusiasm for the volatile stock. Shares shot up today to nearly $90 on the acquisition news.
Keurig released its annual report in November. Despite reductions in revenues and net income from 2015, investors were generally pleased with Keurig's reports, which beat expectations. Keurig reported a strong cash position and increased its dividend. Revenues for FY 2015 were $4.52 billion, down from $4.7 billion in 2014.
Shumlin today issued the following statement:
“I have spoken with Keurig Green Mountain CEO Brian Kelly who has indicated to me that the company will remain headquartered in Waterbury and that there are no plans for any reduction is workforce. That is incredibly good news. Keurig Green Mountain has been important part of Vermont’s economy, culture, and history for decades. I have reached out to officials at JAB Holding to offer Vermont’s assistance and commitment to ensuring that remains true for decades to come.
“Whenever there is news like this about a major employer in Vermont, there is always apprehension. But after my conversations this morning, I am confident that today’s news represents an opportunity for Keurig Green Mountain and Vermont. There is significant opportunity in taking the company private. Importantly, it will now be easier for the company to avoid the whims of Wall Street and focus on long-term growth, which will be good for the company, the employees, and Vermont.
“Today’s news represents a new chapter in the incredible success story of Green Mountain Coffee in Vermont. It is a chapter that I believe will help the company continue to grow, thrive, and make the world’s best coffee right here in Vermont.”
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.
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 with Keurig 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."
Many analysts expected Coke to eventually buy Keurig, because of its large stake in the company, its Keurig Kold initiative spearheaded by Coke and because Kelley is a former Coke executive.
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.
About Keurig Green Mountain, Inc.
Keurig Green Mountain, Inc. (Keurig) (NASDAQ:GMCR) is reimagining how beverages can be created, personalized, and enjoyed, fresh-made in homes and workplaces. We are a personal beverage system company revolutionizing the beverage experience through the power of innovative technology and strategic brand partnerships. With an expanding family of more than 80 beloved brands and more than 575 beverage varieties, our Keurig® hot and Keurig® KOLD™ beverage systems deliver great taste, convenience, and choice at the push of a button. As a company founded on social responsibility, we are committed to using the power of business to brew a better world through our work to build resilient supply chains, sustainable products, thriving communities, and a water-secure world. For more information visit: www.KeurigGreenMountain.com. To purchase Keurig products: www.keurig.com, www.keurig.ca, www.keurig.co.uk. Keurig routinely posts information that may be of importance to investors in the Investor Relations section of its website, www.KeurigGreenMountain.com, including news releases and its complete financial statements, as filed with the U.S. Securities and Exchange Commission ("SEC"). The Company encourages investors to consult this section of its website regularly for important information and news. Additionally, by subscribing to the Company's automatic email news release delivery, individuals can receive news directly from Keurig as it is released.
About JAB Holding Company
JAB Holding Company is a privately held group focused on long-term investments in companies with premium brands, attractive growth and strong margin dynamics in the Consumer Goods category. The group's portfolio includes a controlling stake in Jacobs Douwe Egberts (JDE), the largest pure-play FMCG coffee company in the world, a controlling stake in Coty Inc., a global leader in beauty, and controlling stakes in luxury goods companies including Jimmy Choo, Bally and Belstaff. JAB also has controlling stakes in Peet's Coffee & Tea, a premier specialty coffee and tea company, Caribou Coffee Company, a specialty retailer of high-quality premium coffee products, Einstein Noah Restaurant Group, Inc., a leading company in the quick-casual segment of the restaurant industry, Espresso House, the largest branded coffee shop chain in Scandinavia, and Baresso Coffee A/S, the first and largest branded coffee shop chain in Denmark. JAB also owns a minority stake in Reckitt Benckiser PLC, a global leader in health, hygiene and home products. In July 2015, Coty announced it had reached a definitive agreement to purchase some of Procter & Gamble's beauty brands to create one of the world's largest cosmetic companies. JAB is overseen by its three Senior Partners, Peter Harf, Bart Becht (Chairman) and Olivier Goudet (CEO). For more information, please visit the company's website at: http://www.jabholco.com.
Source: WATERBURY, Vt.--(BUSINESS WIRE) -- JAB Holding Company 12.7.2015