Strauss Group Ltd. (TASE:STRS) unit Strauss Coffee has submitted a draft prospectus to the US Securities and Exchange Commission for an IPO. The company's CEO Gad Lesin unexpectedly revealed the planned IPO after announcing the company's fourth quarter 2014 results.
Strauss Coffee is active worldwide and accounts for half of the parent company's revenue. Strauss Coffee has been active throughout Europe since the 1990s and in 2000 expanded to Brazil. The company then expanded hugely ten years ago by acquiring companies in Poland, Serbia and Brazil. In 2008, US investment firm TPG Capital Management bought a 25.1% stake in Strauss Coffee for $293 million and the capital injected helped the company expand to Russia, Romania, and buy a plant in Germany.
Since last year Strauss Coffee and TPG have been at loggerheads with the US private equity firm demanding a high price exit and unsuccessfully suing the Israeli company in the Dutch courts when it refused TPG's demand that it hold an IPO. Since then it seemed that an IPO was no longer on the agenda.
But Lesin has successfully achieved a reconciliation with TPG that will include an IPO in which TPG will probably sell its stake, and capital will be raised for more acquisitions. Strauss Coffee saw a 3% fall in revenue last year to NIS 3.8 billion due to the erosion of the Russian and Brazilian currencies.
Published by Globes [online], Israel business news - www.globes-online.com - on March 24, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015