Strauss Coffee buys LeCafe brand for $37 mln

TEL AVIV, Nov 28 (BestGrowthStock) – Israeli food and
beverage maker Strauss Group said on Sunday its
coffee subsidiary was buying the LeCafe brand sold in Russia
and former Soviet Union countries for $37 million.

LeCafe had sales of $23 million in 2009 and $16 million in
the first nine months of 2010.

Strauss Coffee also paid $6 million to acquire 51 percent
of the LeCafe Group, which owns buildings and warehouses that
will serve as Strauss’s logistics centre in Russia.

Gadi Lesin, president and chief executive of Strauss, said
the Russian coffee market is considered to be one of the
largest in the world.

“This acquisition takes us to the next level in our growth
strategy in Russia, an area that has presented growth over the
past four years,” he said in a statement.

Strauss, the world’s fifth-largest coffee firm in terms of
green coffee procurement, also plans to use the property to
build a plant to produce roasted and ground coffee that will
be wholly owned by Strauss Coffee.

Strauss Coffee will invest $6 million in building the
plant in 2011 and 2012.

“This acquisition will enable us to enhance our position
as the No. 3 instant coffee player and No. 2 roast and ground
coffee player in Russia,” said Todd Morgan, CEO of Strauss
Coffee. “We will do so by strengthening our portfolio with a
familiar brand, gaining more market shares and increasing our
shelf space significantly.”

Strauss Group owns 74.9 percent of Strauss Coffee with the
rest owned by private investment group TPG Capital .
Strauss Coffee focuses on Israel, Brazil, Poland, the Balkans,
Serbia, Russia and Ukraine.

(Reporting by Tova Cohen, Editing by Steven Scheer)

Strauss Coffee buys LeCafe brand for $37 mln