Business Strategies

Chobani Raises $750 Million in Debt From TPG Capital

By Dave Fusaro, Editor in Chief

Apr 24, 2014

Upstart yogurt company Chobani Inc. is looking more and more like an established company, taking on debt (and possibly an investor), looking for a CEO, expanding into new markets (both product-wise and geographically) and thinking about an initial public offering of stock.

Private equity firm TPG Capital agreed to invest $750 million in Chobani, it was announced April 23. Details did not come from the company, but the New York Times said, although it's being called a loan, TPG is receiving warrants that may allow it to obtain an equity stake in Chobani of as much as 35 percent.

And the Wall Street Journal said the deal's terms stipulate that Chobani find a CEO within a year, replacing founder Hamdi Ulukaya, although he would remain chairman and the largest shareholder. Chobani admitted TPG will get two seats on the New Berlin, N.Y.-based company's board of directors.

Both news organizations talked about Chobani's need for overseas expansion, the likelihood of an IPO, possibly in 2015, and the apparent fact that six potential investors had shown interest in doing a deal with Chobani.

Chobani remains busy, even as global competitors Dannon and Yoplait (owned by General Mills) elbow their way into the "Greek-style" yogurt category – and Germany's Theo Muller Group, with investment from PepsiCo, cranks up marketing and its New York factory.

In the days preceding the TPG investment, Chobani announced "the most significant portfolio expansion in the company’s history, with six new product innovations for July alone that push Greek yogurt beyond breakfast and provide better food for more people throughout the day. The new products include Chobani Greek Yogurt Oats, authentically strained Greek Yogurt mixed with real fruit and whole grain steel-cut oats; Chobani Indulgent, the brand’s first dessert product; and Chobani Kids, among others."

In order to pass the $1 billion mark in sales last year, Chobani has had to invest $250 million in upgrades to its original South Edmeston, N.Y., plant and at least $450 million on its massive new factory in Twin Falls, Idaho. And the company appears on a trajectory to near $1.5 billion in sales this year.