Saturday, 23 August 2014
Last updated 23 hours ago
Jul 11 2014 | 6:23am ET
After six long years that must feel more like 60 for TPG Capital, the private-equity giant is nearly free of an investment that has made it money, but at a price.
TPG and Strauss Group are near a deal to list Strauss Coffee, the Israeli company in which TPG took a 25% stake in 2008. The deal will allow TPG to exit an investment that has produced more headaches and disappointment than solid returns.
When TPG and Strauss consummated their partnership, both had grand expansion plans and hopes to build a global coffee giant. But TPG’s purchased closed just days before Lehman Brothers collapsed, and the deal-making environment dried up, giving Strauss Coffee few takeover targets. In addition, the company struggled in regions like Russia and Eastern Europe.
TPG’s deal with Strauss gave it an out after four years. But plans to sell the coffee company’s Russian and Eastern European business to pay off the private-equity firm fell through. A year later, TPG began pushing for an initial public offering. In May of 2013, it learned—when Strauss’ lawyer mistook a TPG executive for his own lawyer—that Strauss planned to “block” the same.
TPG sued—but saw its case dismissed.
“We are hopeful that we will be able to reach an agreement on all significant outstanding issues,” TPG and Strauss Group, which owns a majority stake in the coffee company that bears its name, said in a joint statement.
TPG is in line to earn a roughly 10% return on its investment.
Aug 4 2014 | 7:42am ET
By now, U.S. and international subscribers have received their home or office delivery of the special 500th issue of Futures magazine. You can too!—a very special offer follows. The issue is the largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders. Read more…
The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.
The Alpha Pages Editor's Note