April 8 (Bloomberg) -- Strauss Group is planning an initial public offering of shares in its coffee unit providing funds for expansion and an exit for partner TPG Capital, Chief Executive Officer Gadi Lesin said.
“An IPO is good for the company and allows TPG to exit, but there are points we don’t agree with and these are under negotiation,” Lesin, 47, said at the company’s Petach Tikvah, Israel headquarters yesterday. “We see ourselves entering more countries. An IPO will give us access to funds for growth and acquisitions.”
A string of acquisitions and partnerships transformed Strauss into the number-one coffee seller in Brazil and the fourth-largest in the global retail coffee market, Lesin said. The unit, which also sells coffee in Russia and in Central and Eastern European countries, last year brought in about half of the Israeli food maker’s total sales.
Strauss is negotiating with private equity fund partner TPG to resolve a dispute over the destiny of the coffee unit, Lesin said. Ft. Worth, Texas-based TPG is seeking to exit its 25 percent investment in the business either through a sale or an initial public offering. Its suit accusing Strauss of misconduct was dismissed by a Dutch court in December 2013. A share sale in New York is in the best interest of all parties, TPG said in an e-mailed statement to Bloomberg.