Gadi Lesin, President & CEO of Strauss Group, said Sunday: "Strauss Group is today completing another phase in the expansion and enhancement of its competitive position in the Russian coffee market which 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. It follows several acquisitions conducted by the company in recent years along with steady organic growth, which have all transformed Strauss Coffee Russia from a $20 million company (at the end of 2007) to a $160 million company, post-acquisition."
Todd Morgan, CEO of Strauss Coffee, said today: "This acquisition will enable us to enhance our position as the number 3 instant coffee player and number 2 R&G coffee player in Russia. We will do so by strengthening our portfolio with a familiar brand, gaining more market shares and increasing our shelf space significantly."
Strauss Group subsidiary Strauss Coffee B.V. 74.9% has acquired the LeCafebrand sold in Russia and CIS from the privately owned LeCafe Group based in Russia. Gross revenues of the brand stood at $23 million in 2009 and at $16 million by the end of September 2010.
Strauss Coffee will pay US$ 37 million for the brand on the transfer date of ownership to Strauss Coffee.
Additionally, Strauss Coffee acquired 51% of LeCafe Group shares for US$ 6 million. LeCafe is the owner of real estate in the Strunino area of Vladimiri Region such as buildings and warehouses that will serve as a logistics center for Strauss's activity in Russia, and as an area where Strauss Coffee will set up a wholly-owned R&G coffee plant. LeCafe also engages in the sale of non-branded instant coffee in Russia and CIS.
Strauss Coffee plans to invest US$ 6 million in the construction of the plant in 2011 and 2012.
The transaction and construction of the plant will be funded by Strauss Coffee.
Strauss Coffee is one of five companies affiliated with Strauss Group and operating in CEE, Brazil and Israel, Strauss Coffee is currently the fifth-largest coffee company in the world in terms of green coffee procurement volumes and one of the world's fastest growing coffee companies over the past five years.
Strauss Coffee employs 6,000 people, and its turnover totaled NIS 3.35 billion at the end of 2009.
Strauss Coffee's activities focus on the R&G (Roast & Ground) sector, and it also produces and markets instant coffee. The company also engages in coffee related products, providing coffee solutions to both the in-home and away from home markets, including coffee shops, restaurants, hotel and offices.