TPG mulling Strauss Coffee exit

Strauss Group has announced that private equity giant TPG is mulling the sale of its 25.1 percent share in Strauss Coffee, stating that “the process of considering possibilities for selling the shares has begun.”

TPG purchased the shares for $293 million in 2008, and was granted a two-year option to acquire a further 10 percent of the coffee company’s shares at its then-present value, plus 6 percent interest per year.

But the relationship turned sour after Strauss ousted Todd Morgan, the joint venture’s CEO and a former TPG employee, in early 2014 after a court battle. The relationship was mired further with reported squabbles over fees and failed deals which fell short of original growth projections.

TPG had also pushed for an IPO, but it never materialized – despite Strauss announcing in March 2015 that it had submitted a draft prospectus to the Securities and Exchange Commission for the potential public offering.

The parent company, Strauss Group, the largest food products manufacturer in Israel, announced a 5.8 percent organic sales growth in Q3. TPG declined to comment.