Dive Brief:
- SodaStream International is negotiating with an unnamed investment group to sell the company and take it private, according to Bloomberg Businessweek.
- Details of the deal are few, but the transaction is said to value the company at about $828 million.
- Shares surged on the news, rising as much as 26% in intraday trading.
Dive Insight:
We've been down this road before. Market rumors swirl that someone is about to buy SodaStream. Share prices jump. And then nothing happens.
This time, however, things may be different. Growing competition in the space (particularly Coca-Cola's decision to invest in Keurig's upcoming system) combined with the fact that SodaStream operates in the occupied territories of Palestine, have made SodaStream a less attractive play. That has pushed share prices downward.
SodaStream has fewer options available to it than it did just a few months ago: Its home country is seeing heavy fighting; the company has little debt. That combination -- few options, vulnerability, unleveraged balance sheet -- makes it a very likely target for a leveraged buyout by a private equity company. Which is exactly the scenario that Bloomberg Businessweek says is happening.