Green Mountain Coffee Roasters (GMCR), maker of the popular Keurig single-cup coffee brewer, said on Wednesday that Coca-Cola (KO) had bought a 10 percent stake in it for $1.25 billion and would help launch Green Mountain's planned cold drink machine.
Under their 10-year agreement, Green Mountain and Coca-Cola will collaborate on the development and introduction of Coca-Cola products on Green Mountain's planned cold beverage machine that will serve both carbonated and non-carbonated beverages, including soft drinks, tea and juice.
The new machine will carry products from multiple brands, Green Mountain's President and Chief Executive Brian Kelley said on a conference call with reporters.
Under the terms of the agreement, Coca-Cola will acquire roughly 16.7 million newly issued shares of Green Mountain. The new shares have been priced at $74.98, which represents the trailing 50-trading-day volume weighted average price as of market close.
Green Mountain separately reported better-than-expected quarterly profit on Wednesday.
The Waterbury, Vermont-based company reported net income of $138.2 million, or 91 cents per share, for the fiscal first quarter ended Dec. 28, up from $107.6 million, or 70 cents per share, a year earlier.
On an adjusted basis, the company earned 96 cents per share - 6 cents better than analysts on average had expected, according to Thomson Reuters I/B/E/S. .
Net sales rose almost percent to $1.39 billion.