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TPG Invests $750M in Chobani

Stocks in this article: PEP WFM

NEW YORK (The Deal) -- Chobani, the company at the forefront of the U.S. consumer's Greek yogurt obsession, said late Wednesday it received a $750 million cash injection from private equity firm TPG Capital.

In exchange, TPG received warrants for up to a 35% stake in the New Berlin, N.Y.-based business, a source familiar with the situation said, but if the company exceeds performance expectations the stake could be worth less than 20%.

The possibility of TPG holding a 35% stake would currently value Chobani at just over $2.1 billion. TPG will have seats on Chobani's board, but did not specify the number.

"This investment gives us additional resources to build on our momentum, fund our exciting new innovations and reach new people. Most importantly, it positions us to further deliver on our vision to provide better food for more people," said Chobani CEO Hamdi Ulukaya in a statement.

Next up for Chobani is a potential initial public offering. A sale to a strategic is also a possibility, the source said. In the run-up to Wednesday's announcement, the Greek yogurt business considered offers from a number of parties, including strategics, a source said.

The Deal Pipeline reported earlier this year that bankers have floated the idea of a sale of Chobani to the likes of beverage and snack food giant PepsiCo (PEP).

Chobani's revenue exceeded $1 billion in 2013, the company said. It produces its Greek yogurt in Twin Falls, Idaha, as well as in New Berlin. Even as the company talked about its plans for growth in light of the investment, the desire for cash was not only driven by a desire to grow the business.

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