NEW YORK (TheStreet) -- Shares of Keurig Green Mountain (GMCR) are up 1.21% to $136 in pre-market trade after the specialty coffee and coffeemaker businesses technology company said it has entered into an agreement to acquire the outstanding equity of MDS Global Holding ("Bevyz") that it does not already own.
The transaction is valued at approximately 178 million euros, in cash, or approximately $220 million based on exchange rates as of the close of business on December 3, 2014.
Keurig currently owns approximately 15% of Bevyz on a fully diluted basis and will fund the acquisition with cash on hand. The transaction is subject to customary closing conditions and is expected to close in the next month.
TheStreet Ratings team rates KEURIG GREEN MOUNTAIN INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate KEURIG GREEN MOUNTAIN INC (GMCR) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 1.8%. Since the same quarter one year prior, revenues rose by 14.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- GMCR's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GMCR has a quick ratio of 1.76, which demonstrates the ability of the company to cover short-term liquidity needs.
- 43.13% is the gross profit margin for KEURIG GREEN MOUNTAIN INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.79% is above that of the industry average.
- KEURIG GREEN MOUNTAIN INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, KEURIG GREEN MOUNTAIN INC increased its bottom line by earning $3.74 versus $3.16 in the prior year. This year, the market expects an improvement in earnings ($4.20 versus $3.74).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Food Products industry average. The net income increased by 11.1% when compared to the same quarter one year prior, going from $126.96 million to $141.06 million.
- You can view the full analysis from the report here: GMCR Ratings Report