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Israel’s Strauss Group, TPG eye U.S. IPO for coffee unit-Reuters

(Reuters) – Israeli food and drinks maker Strauss Group reported higher quarterly net profit and is examining an initial public offering of its coffee subsidiary on a U.S. stock exchange.

Strauss and its partner in Strauss Coffee, U.S. buyout firm TPG Capital Management, have submitted a draft confidential prospectus to the U.S. Securities and Exchange Commission, Strauss said on Monday.

Strauss, a maker of snacks, fresh foods and coffee, is a market leader in roast and ground coffee in central and eastern Europe and Brazil.

A year ago, a source familiar with Strauss Coffee told Reuters that an overseas lifting would enable TPG to halve its 25 percent stake in the Dutch-registered company.

TPG, which bought its stake in 2008 for $293 million, has been feuding with Strauss ever since TPG tried to keep Todd Morgan, a former TPG employee, from losing his job as chief executive of the coffee firm. It lost that fight in court and Morgan was ousted early last year.

Israel’s second-largest food and beverage company, earned an adjusted 84 million shekels ($20.8 million) in the fourth quarter, up from 70 million a year earlier, thanks to lower costs due to currency hedging transactions as well as lower tax expenses.

Sales rose 0.3 percent to 2.08 billion shekels but excluding foreign exchange effects, sales grew 2.8 percent.

Coffee sales rose 2.4 percent to 1.03 billion shekels, led by a 4.8 percent increase in international coffee sales. Excluding currency effects, total coffee sales grew 9.4 percent.

Coffee sales in Israel, where the market is slowing, fell 8.7 percent.

Sales at its dips and spreads joint venture with PepsiCo rose 30.1 percent