| Press Release | Source: Strauss Group Ltd |
Strauss Group Sign an Agreement With the Italian Coffee Company Don Café to Acquire it's Coffee Business in Albania, Kosovo and Macedonia
Wednesday May 14, 7:35 am ET
RAMAT GAN, Israel, May 14 /PRNewswire/ -- Strauss Group (TASE: STRS) announced this morning that an agreement had been signed between Strauss Coffee and the Italian company Don café for the acquisition of the latter's coffee business in Albania, Kosovo and Macedonia, its trademarks Don café and Princ which are registered in a number of countries in the EU as well as in Central and Eastern Europe, as well as fixed assets, inventory and working capital.
The business that was acquired is profitable and its turnover totaled approximately 4।5 million Euro in 2007.
Strauss Coffee paid 7.5 million euro for the business, the brands, inventory and the fixed assets.
Erez Vigodman said:" this acquisition is complementary to our operations in the former Yugoslavia countries and it supports our continued expansion in this region, which has great growth potential. In the past few years we have been active in this region with the Doncafé brand, mainly in Serbia, Montenegro and Bosnia, and have turned it into a leading brand in these countries in the roast and ground (R&G) coffee segment and other coffee related products and services by applying a well designed marketing and communications strategy, while also building a state-of-the-art R&G production facility to world standards in Serbia. Acquiring a business whose name and major brand are the same as ours , will enable us to explore the possibility of extending the use of the brand to other geographies, after checking the viability of such moves, while leveraging the know-how, competencies and infrastructures we have built in this part of the world to more countries, and perhaps even to other geographical regions."
About the transaction:
Doncafe Italy is active in the R&G category through the brands Don and Princ. Strauss Coffee is active through the brand "Doncafe" in Serbia, Montenegro and Bosnia, after having acquired the Doncafé Company in Serbia. The transaction, closed in 2005, granted Strauss ownership of the Doncafé brand in these countries only. Strauss Coffee has significantly grown its business in these countries in the past few years, developing a marketing and communications strategy for the brand and establishing a world-class coffee plant. During the same period the Italian Doncafé business (now being acquired) was active mainly in Albania, Macedonia and Kosovo, focusing on espresso coffee.
The transaction grants Strauss complete ownership of the brand and of a number of sub-brands, and includes the acquisition of the existing production facilities in Albania.
The Princ brand is considered a leading brand and possesses the largest market share in R&G coffee in Kosovo, while Doncafé is considered the second-largest brand in Albania in the same category.
The sales turnover acquired totaled approximately EUR 4.5 million in 2007.
Strauss plans to explore the possibility of extending the brand's business to other countries in which the group is active today. The acquired operations will be managed by Strauss Coffee in Serbia, and the products under the acquired brands will be manufactured in part in the plant in Albania and in Strauss Coffee's existing plants in the region.
The acquisition will be financed from the company's internal resources.
About Strauss Coffee:
Today, Strauss Coffee is the seventh largest coffee company in the world in terms of green coffee consumption, and one of the world's fastest growing coffee companies over the past five years.
In this period Strauss Coffee has tripled in size, growing from NIS 1 billion in 2002 to NIS 2.9 billion at the end of 2007, with the international coffee business accounting for NIS 2.3 billion (almost four times as high as the corresponding figure for 2002).
Strauss Coffee recently signed an agreement with the international equity fund TPG to become a shareholder in Strauss Coffee following the acquisition of 25% of Strauss Coffee's shares, at an enterprise value of approximately US$1 billion (pre-money).
Strauss Coffee's activities focus on the R&G segment and other coffee related products (instant coffee, chocolate and cocoa powders, cappuccino, espresso, organic coffee) and services (particularly solutions for Away-From-Home coffee consumption).
The company enjoys a leading position in the coffee markets in Israel, Central and Eastern Europe and Brazil.
The geographic clusters in which the company is active today include Israel, Brazil (through a joint venture with the Lima brothers in Santa Clara), Poland, the Balkans (Romania and Bulgaria), the former Yugoslavia countries (mainly Serbia), and the former USSR countries (mainly Russia and Ukraine).
The green coffee procurement center, which serves the entire group, is located in Zug (Switzerland). Additionally, Santa Clara owns green coffee processing plants in Brazil which export coffee for the group's activities as well as for external customers worldwide.
Since the beginning of 2007 the Strauss coffee business operates as one company (including the coffee business in Israel), reporting to the CEO and the management of Strauss Coffee.
In the next few years the group plans to enhance the coffee company's growth and expansion process.
The deceleration of the economic growth in the United States and in Europe seems to have quite an impact on the Albanian economy. The instability in the financial markets is causing a reduction and costly international crediting. The representative of the World Bank says that for a country like Albania, where a part of the growth in the crediting market is supported by the remittances (foreign transfers), therefore this situation might lead to a reduction of the crediting market, which assists the promotion of the economic growth.