Keurig, the maker of single-cup coffee machines, said Monday it has agreed to be sold to private equity firm JAB Holding Co. for almost $14 billion. Its shares rose more than 74% in premarket trading Monday. Keurig has been dealing with slowing sales of its machines and K-Cups, the coffee-filled pods used in the coffeemakers. 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. Sales of its machines fell 23% to $632.6 million in the same period. Its stock has suffered, too, falling nearly 61% since the beginning of the year. In fact, the stock was the seventh-worst performing stock on the Standard & Poor's 500 index for the year.
Luxembourg-based JAB Holding said it offered $92 for each share of Keurig, a 78% premium from the stock's closing price of $51.70 on Friday. JAB Holding already has a robust coffee empire, with a controlling stake of Jacobs Douwe Egberts, the company behind Gevalia, Tassimo, and other brands. It also has stakes in Peet's Coffee & Tea and Caribou Coffee. Outside of coffee beans, JAB Holding has a controlling stake of beauty company Coty and high-end shoe seller Jimmy Choo. After the deal closes, which is expected to happen in the first quarter of next year, Keurig Green Mountain Inc. said it will remain headquartered in Waterbury, Vt. (Keurig has previously admitted its K-Cup fail.)