Strauss, Richard Branson join forces
Virgin's investment fund to invest $7.5 million in Strauss Water's business expansion to England and Ireland, targeting France, Australia and South Africa for later expansion
Strauss Water reported Sunday it had signed an agreement for a joint venture with several companies from the Virgin Group owned by Richard Branson.
The Virgin-Strauss water partnership will encompass the marketing, sales and servicing of Strauss's water products in England and Ireland, targeting France, Australia and South Africa for expansion at a later stage.
In the initial round, Virgin Green Fund (VGF) will invest $7.5 million and Strauss will invest $2.5 million at a pre-money valuation of $8 million of the partnership. Once the first round investments are made, VGF will own a 42% stake in the company and Strauss will own a 58% stake.
VGF has an option to invest another $6.2 million and Strauss Water can invest a further $3.8 million splitting the ownership 51% to Strauss Water and 49% to VGF.
The company's board of directors will comprise three directors from Strauss, two from VGF and one director from Virgin Group.
Virgin Strauss Water will acquire products and receive services from Strauss Water and will also gain access to services from the Virgin Group.
Strauss Water estimates that the company will require further investments in order to fund its expansion to other countries.
Once the deal is concluded, Strauss Water is expected to post an NIS 18 million (about $5 million) capital gain due to changes in the company's ownership under the current terms of the deal; Strauss's share of the projected capital gains is some NIS 16 million ($4 million).
Gadi Lesin, president & CEO of Strauss Group, said: "Our connection with Virgin has exceptional strategic implications in laying the groundwork for further development of Strauss Water as a key growth driver of the Group in the coming years.
"Strauss Water brings knowledge and expertise in water treatment, and Virgin Group is a world leader in creating consumer value with a powerful, loved brand."
Virgin Group ("Virgin") is a leading international investment group and one of the world's most recognized and respected brands.
Founded in 1970 by Sir Richard Branson, Virgin has gone on to grow successful businesses in sectors ranging from transport, mobile telephony, financial services, leisure, music, renewables and health and wellness.
VGF's Global branded revenues in 2010 exceeded £13 billion (about $21 billion).
Strauss Water is a world leader in providing quality drinking water, engaged in the development, production and marketing of drinking water purification, filtering, heating and cooling systems.
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