Keurig to Be Sold to Global Coffee Empire
A private equity firm will acquire Keurig Green Mountain in a $13.9 billion deal.
The Vermont-headquartered company, which specializes in single-serve coffee machines, announced the deal Monday with an investor group headed by JAB Holding Co.
Luxembourg-based JAB already is involved in several major coffee and beverage companies. The private firm holds the controlling stakes in Jacobs Douwe Egberts, Peet’s Coffee & Tea and Caribou Coffee Company.
The deal comes after a rocky period for Keurig. The Wall Street Journal reported that in the last year, stock had fallen by 61 percent. In August, the company laid off 200 employees from their Waterbury, Vt., plant.
Under the deal, JAB will purchase Keurig for $92 per share — which amounts to a 78 percent increase over the closing price on Friday, according to the company’s announcement.
Stocks closed out Friday at around $52, and currently are trading at $89 per share.
In a statement, Brian Kelley, president and CEO of Keurig, said that the sale will “deliver significant cash value” for shareholders, and that he expects the deal will lead to “an exciting new chapter,” allowing the company to collaborate with JAB’s other coffee producers.
Bart Becht, chairman of JAB, hailed the acquisition as “a major step forward in the creation of our global coffee platform.”
“Keurig Green Mountain will operate as an independent entity to ensure it will further build on its coffee and technology strength and continue to serve all its partners to the best of its abilities,” Becht said in a statement.
Gov. Peter Shumlin issued a statement in the wake of the announcement that he had been in touch with Kelley and had been assured that the company will continue to be headquartered in Waterbury.
“That is incredibly good news,” Shumlin said in a statement. “Keurig Green Mountain has been an important part of Vermont’s economy, culture and history for decades.”
Ultimately, the governor heralded the deal.
“Whenever there is news like this about a major employer in Vermont, there is always apprehension,” Shumlin said. “But after my conversations this morning, I am confident that today’s news represents an opportunity for Keurig Green Mountain and Vermont.”
As of September, Keurig Green Mountain employed some 6,000 people in total, a third of whom work in Vermont, a company spokesperson said Monday.
Keurig, which started as Green Mountain Coffee Roasters in 1981, also has been a regular recipient of Vermont’s incentives for job creation since 2007. Under the Vermont Employment Growth Incentive, or VEGI, the company has been approved for more than $7.7 million in four separate payouts.
Tim McQuiston, editor of Vermont Business Magazine, said that for some investors, this is likely to be good news — especially following the “uncertainty” with the cold beverage machine unveiled earlier this year, and the “disappointment” in the Keurig 2.0, a revamped brewer system that does not use the same size pods as other machines.
He also anticipates some “melancholy” among some Vermont investors.
“I think there’s a little bit of disappointment that Vermont is losing this company,” McQuiston said.
McQuiston does not expect the company will move its production headquarters from Vermont soon, nor does he foresee layoffs in the near future.