Chobani, the Greek yogurt maker that has grown into a U.S. sensation, is looking to sell a minority stake in a deal that could value the company at around $2.5 billion, people familiar with the matter said.
The company is working with Bank of America Corp (BAC.N) as it considers selling roughly 20 percent, and is speaking to consumer companies and private equity firms to gauge their interest, the people said on Monday.
Chobani, based in New Berlin, New York, previously held discussions with banks about pursuing an initial public offering, but switched gears in the face of mounting competition from other Greek yogurt companies, the people said.
The people declined to be named because the matter is not public.
Representatives for Chobani did not immediately respond to requests for comment, while Bank of America declined to comment.
Founded in 2005 by Turkish immigrant Hamdi Ulukaya, Chobani started operating from a former Kraft Food yogurt plant in South Edmeston, New York, and grew into one of the top-selling Greek yogurt brands in the United States.
Chobani’s sales grew more than 30 percent in 2013 to over $1 billion, according to a person familiar with the company.
The company suffered a blow in September after it was forced to recall moldy cups of Greek yogurt after customers complained that the product tasted runny and fizzy, and some reported illnesses.
And in December, Whole Foods Market Inc (WFM.O) said that it would no longer sell Chobani yogurts starting early this year.
Chobani expects little impact from the end of the relationship since the supermarket represented less than 0.5 percent of its retail distribution, the person familiar with the company said.
Greek-style yogurt, which is thicker, creamier and often higher in protein than other types of yogurt, now makes up more than 40 percent of the U.S. yogurt market, which is worth $7.4 billion according to research firm Mintel.
Chobani competes with brands such as Danone SA’s (DANO.PA) Oikos and General Mills’ (GIS.N) Yoplait.
(Reporting by Olivia Oran. Additional reporting by Martinne Geller in LONDON; Editing by Soyoung Kim and Lisa Shumaker and Miral Fahmy)
Take your pick!
- Buyouts delivers exclusive news and analysis about private equity deals, fundraising, top-quartile managers and more. Get your FREE trial or subscribe now.
- VC Journal provides exclusive news and analysis about venture capital deals, fundraising, top-quartile investors and more. Get your FREE trial or subscribe now.