Strauss Group Ltd. (TASE:STRS) has sold 25% of Strauss Coffee BV to Texas Pacific Group Capital (TPG) for $288 million, giving a company value of over $1 billion for the business. TPG Capital is one of the world's largest private equity funds, with over $50 billion in assets under management.
TPG Capital also received a two-year option to acquire an additional 10% of Strauss Coffee at a price 6% higher than the present deal. Strauss Group expects to record a capital gain of $85 million, net of transaction costs, after allocating the fair value to the option granted to TPG.
The Strauss coffee business is incorporated under Strauss Coffee BV which is a wholly-owned Dutch subsidiary of the Strauss Group; the coffee business of Strauss in Israel (which is included in the transaction) will be transferred to Strauss Coffee BV in conjunction with TPG's acquisition of shares in the Dutch company.
Strauss chairwoman Ofra Strauss said, "We chose to introduce a financial investor with leading global competencies to our coffee company, who, together with us, will accelerate the realization of our coffee company's global expansion strategy. The board of directors and I believe that introducing TPG as a partner in the coffee company will maximize the company's value as it executes the moves it has planned in the next few years in creating a world-leading global coffee company."
Strauss CEO Erez Vigodman added, "In the past six years we have turned our coffee company into one of the fastest growing businesses in the world coffee industry, expanding in geographical regions with the highest growth rate in coffee, and building a leading competitive position in all markets where we are active." He concluded, "We strongly believe that together we'll be able to build one of the most exciting and leading global companies in the world coffee industry."
Published by Globes [online], Israel business news - www.globes-online.com - on May 4, 2008
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