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.
Since the financial crisis, Warren Buffett's Berkshire Hathaway has had significant exposure to financial stocks in its portfolio. Q1 2021 hedge fund letters, conferences and more At the end of March this year, Bank of America accounted for nearly 15% of the conglomerate's vast equity portfolio. Until very recently, Wells Fargo was also a prominent Read More
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.