Sodastream International Ltd (NASDAQ:SODA) may be in talks to sell itself. Bloomberg cites unnamed sources who said the home soda machine maker is talking with an investment firm about a go-private deal.
Details on the rumored deal
The deal is supposedly worth around $828 million or approximately $40 per share. That’s a 38% premium from Wednesday’s closing price. Bloomberg’s sources said Sodastream and the firm it is speaking with have not yet reached a final deal and that it could still fall apart. The sources also indicated that “several” private-equity firms have been considering doing a leveraged buyout on Sodastream.
If Sodastream is able to secure a deal, it would put an end to the volatility that has plagued invetors since its $20 per share initial offering in November 2012. The Israel company’s stock surged to nearly $78 per share in August 2011 after it reported consecutive quarters of at least 50% increases in sales. However, growth in Sodastream’s revenue fell under 40%, and the company’s guidance disappointed investors, sending shares under $30 later that same year. Then last summer, Sodastream stock climbed over $76 per share but then slumped again thanks to increasing competition.
Sodastream battles Keurig Green Mountain
Sodastream has certainly seen better days. In May, The Coca-Cola Company (NYSE:KO) increased its stake in Sodastream competitor Keurig Green Mountain Inc (NASDAQ:GMCR), creating a strong partnership to battle Sodastream.
Since earlier this year, there have been rumors that Sodastream would also form a key partnership. Starbucks Corporation (NASDAQ:SBUX) was seeking a stake in the company as early as April. That same month, it was reported that Sodastream was seeking to sell a 16% stake. Some possible suitors that were named at that time were PepsiCo, Inc. (NYSE:PEP), Starbucks and Dr Pepper Snapple Group Inc. (NYSE:DPS). Pepsi was seen as the potential leading contender because of the partnership between Coca-Cola and Keurig Green Mountain.