Keurig bought by firm that owns Peet’s Coffee

With shares now trading only a few dollars below the proposed acquisition price – and unless investors are holding to take advantage of lower long-term capital gains taxes – I think Keurig Green Mountain shareholders would be wise to take today’s profits and put them to work elsewhere.

The Vermont-headquartered company, which specializes in single-serve coffee machines, announced the deal Monday with an investor group headed by JAB Holding Co.

Buying Keurig will get JAB Holding closer to coffee market leader Nestle, said Stifel analyst Mark Astrachan, in a note to clients.

BofA Merrill Lynch and Credit Suisse provided fairness opinions to Keurig Green Mountain. It is a fantastic company that uniquely brings together premium coffee brands and new beverage dispensing technologies like the famous Keurig single serve machine, ” JAB chairman Bart Becht said.

The deal comes after a rocky period for Keurig.

The acquisition follows a string of other coffee-related deals for JAB.

The deal suggests that the potential synergy among Keurig and JAB’s other coffee properties – including Jacobs Douwe Egberts, Peet’s Coffee & Tea and Caribou Coffee – may benefits JAB as JAB seeks to reverse Keurig’s fortunes.

JAB has invested heavily in the USA coffee market.

In gearing up for the coffee confrontation, JAB in July formed with Mondeles International a joint venture Jacobs Douwe Egberts – the largest pure-play coffee maker in the world.

JAB’s goal is to be the Budweiser of coffee, Pablo Zuanic, an analyst at Susquehanna International, said Monday.

The real novelty, though, is JAB’s caffeine-themed consolidation plan. The K-Cup is the coffee-filled pod used in the machines made by Keurig. The stock through Friday had dropped more than 60% this year. 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.

Greenlight still had a small short position in Keurig as of Monday, according to a person familiar with the matter. No wonder Coca-Cola was in favor of this deal taking place.

Keurig Green Mountain’s decision to be acquired signals an end of sorts to the dramatic story of the company who pioneered the popularity of single-cup brewing systems. Sales of K-cups, which accounted for more than 80% of Keurig revenue, rose 1% to $3.6 billion in the year ending September 26.

Keurig has partnered with Coke and Dr. Pepper Snapple Group Inc on branded pods for its Kold machine. It has facilities in Williston, South Burlington and Essex that perform production and professional services, according to its website.