Strauss Group Announces Further Expansion of Strauss Coffee in Russia

Strauss Group is announcing that its subsidiary Strauss Coffee B.V. (74.9%) has acquired the LeCafebrand sold in Russia and CIS. Gross revenues of the brand stood at $23 million in 2009 and at $16 million by the end of September 2010.

29 Nov 2010 --- Gadi Lesin, President & CEO of Strauss Group, said: "Strauss Group is completing another phase in the expansion and enhancement of its competitive position in the Russian coffee market which is considered to be one of the largest in the world. This acquisition takes us to the next level in our growth strategy in Russia, an area that has presented growth over the past four years.

It follows several acquisitions conducted by the company in recent years along with steady organic growth, which have all transformed Strauss Coffee Russia from a $20 million company (at the end of 2007) to a $160 million company, post-acquisition."

Todd Morgan, CEO of Strauss Coffee, said: "This acquisition will enable us to enhance our position as the number 3 instant coffee playerand number 2 R&G coffee player in Russia. We will do so by strengthening our portfolio with a familiar brand, gainingmore market shares and increasing our shelf space significantly."

About the transaction:

Strauss Group is announcing that its subsidiary Strauss Coffee B.V. (74.9%) has acquired the LeCafe brand sold in Russia and CIS. Gross revenues of the brand stood at $23 million in 2009 and at $16 million by the end of September 2010.

Strauss Coffee will pay USD 37 million for the brand. The consideration will be paid on the transfer date of ownership to Strauss Coffee.

Additionally, Strauss Coffee acquired 51% of LeCafe Group shares for USD 6 million. LeCafe is the owner of real estate such as buildings and warehouses that will serve as a logistics center for Strauss's activity in Russia, and as an area where Strauss Coffee will set up a wholly-owned R&G coffee plant.LeCafe also engages in the sale of non-branded instant coffee in Russia and CIS.

Strauss Coffee plans to invest USD 6 million in the construction of the plant in 2011 and 2012.

The transaction and construction of the plant will be funded by Strauss Coffee.