Sources inform ''Globes'' that Central Bottling Co. (Coca-Cola Israel) subsidiary Tara Agricultural Producers Cooperative Society in Nahalat Izhak Ltd. (Tara Dairies) has acquired Zuriel Bros. Farm Ltd. for $6 million. A deal was signed after year-long negotiations, which “Globes” exclusively reported in May 2005.
Zuriel Bros. Farm co-managing director Asher Zuriel also conducted negotiations with Strauss-Elite Ltd. (TASE:STEL) and Neto ME Holdings Ltd. (TASE;NTO). He asked for $10 million for the company. Tara Dairies had considering merging with a competing dairy, in order to compete against Tnuva Food Industries Ltd. and Strauss. Tara Dairies also considered acquiring Gad Dairies Ltd. for this purpose.
Zuriel Brothers Farm, which has a negligible share of Israel’s dairy products market, has always produced niche products, including soy products and goat cheeses. Until recently, it was unable to break into the feta-type cheese market, and was almost driven out of the soy market by Tnuva’s domination. When Strauss quit producing soy delicacies, Zuriel Bros. Farm enjoyed a resurgence in its market share, but this is a very small market.
Tara Dairies acquisition of Zuriel Brothers Farm supplements its basket of products for both the general and institutional markets, which was the purpose of the deal.
Industry sources said Zuriel Brothers Farm had been financially troubled lately, which forced Asher Zuriel to seek a partner. Four years ago, he told “Globes” that he was seeking a strategic partner. He denied that financial difficulties were the reason for this move. “I’m not aware that I was in financial difficulty. We’ve been the fastest growing food company lately. Our sales are up 30%,” he said. Zuriel Brothers Farm posted NIS 60 million in sales.
In addition to acquiring small Israeli dairies, Tara Dairies is seeking an international partner. The company will reportedly sign a contract with the Emmi Group of Switzerland (SWX:EMMN), which once had an agreement with Tnuva to market Emmi brand yogurt in Israel that ended due to lack of sales.
Tara Dairies has NIS 460 million in turnover. It recently merged its sales infrastructure with Coca-Cola Israel. The company’s loss reportedly grew to NIS 20 million in 2005.
Published by Globes [online], Israel business news - www.globes.co.il - on February 15, 2006