Strauss Group Ltd. (TASE:STRS) subsidiary Strauss Coffee BV has acquired the Le Café label, sold in Russia and CIS countries, for $37 million. Le Café also sells non-branded instant coffee in Russia and CIS countries.
Le Café had $16 million in sales in January-September 2010 compared with $23 million in 2009 as a whole.
Strauss Coffee also acquired 51% of Le Café's shares for $6 million. Le Café owns buildings, warehouses and other real estate properties, which will serve as Strauss Coffee's logistics center in Russia and for the construction of a coffee products factory, which will be wholly owned by the company. Strauss Coffee will invest an additional $6 million in 2011-12 in the construction of this factor.
Strauss said that Strauss Coffee will finance the acquisition and the construction of the factory from its own resources.
Strauss CEO Gadi Lessin said, "This acquisition is another step in the company's growth strategy in Russia. The company's business in Russia has grown over the past four years, due to acquisitions and organic growth that has turned Strauss Coffee Russia from a $20 million company at the end of 2007 to a $160 million company following the latest acquisition."
Strauss Coffee has 6,000 employees and had a turnover of NIS 3.35 billion in 2009, and NIS 2.67 billion in January-September 2010.
Strauss Group owns 79.4% of Strauss Coffee. Strauss' share price rose 0.5% in morning trading to NIS 55.82. giving a market cap of NIS 5.9 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on November 28, 2010
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