Luigi Lavazza likes what it sees in Green Mountain Coffee Roasters
In return, Lavazza gets a 7% stake of freshly printed shares, and it'll have the right to purchase as much as 15% of the company.
Is this validation for Green Mountain, or dilution for its shareowners? It's a little bit of both, although the way that Green Mountain has been snapping up regional coffee faves and leading K-Cup suppliers, the balance sheet-buffing investment could also make Green Mountain an even bigger acquisition target.
However, perhaps the neatest wrinkle in the deal is that the two companies will combine to create a Keurig-esque machine for high-end espresso brews.
A pod-based, single-serve espresso machine isn't new. Global juggernaut Nestle (OTC BB: NSRGY.PK) has its Nespresso appliance. Kraft's
If anything, Lavazza has indicated that making a stateside splash in the single-cup espresso market will be easier through Green Mountain -- even if the new device won't hit the market for at least another three years.
Green Mountain doesn't need a second driver at the moment. Revenue soared 64% in its latest quarter, as the K-Cup craze invades homes, corporate break rooms, restaurants, and hospitality specialists. Even Jarden's
However, K-Cup patent timelines will come into play in a couple of years. With that deadline looming, Green Mountain is wisely exploring diversification opportunities.
Clearly, this is an expanding market. Starbucks
Now that the euro has finally showed some signs of life against the dollar, it wouldn't be a surprise to see more European food giants start to take a few sips of their American counterparts.
Are you buying into coffee companies these days? Share your thoughts in the comments box below.
Longtime Fool contributor Rick Munarriz doesn't fancy himself much of a coffee drinker, even though he lives within walking distance of three different Starbucks locations and has owned a Keurig machine for three years. He does not own shares in any of the stocks in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.