The yogurt maker Chobani has struck a deal with private equity.
Chobani, a fast-growing company in upstate New York, said on Wednesday that it had secured a $750 million loan from TPG Capital, a big private equity firm. The fresh capital, coming after a competitive process in recent weeks, is intended to help Chobani add new products and expand overseas.
Though the money is in the form of a loan, TPG is also receiving warrants that may allow it to obtain an equity stake in Chobani of as much as 35 percent, people with direct knowledge of the deal said. The warrants convert to equity if Chobani achieves certain goals — the most important of which is an initial public offering or other sale, said the people, who spoke on condition of anonymity. Chobani is hoping to go public as early as 2015.
“Chobani has experienced tremendous growth and leads one of the most exciting aisles in the supermarket,” the chairman and chief executive, Hamdi Ulukaya, said in a statement. “This investment gives us additional resources to build on our momentum, fund our exciting new innovations and reach new people.”
The new capital represents a new phase in the growth of Chobani, which Mr. Ulukaya founded in 2005. Last year, the company recorded revenue of more than $1 billion. It plans to introduce new products, including a dessert and a yogurt mixed with steel-cut oats, which go beyond its flagship Greek yogurt offerings.
The financing round was not based on a particular valuation, but the company believes it is worth around $5 billion, according to the people with knowledge of the deal. Mr. Ulukaya owns 100 percent of the equity. A major reason the company pushed for a loan, rather than a straight equity investment, was to prevent dilution, the people said.
Six potential investors had shown interest in doing a deal with Chobani. But TPG emerged as the leader in late March. The private equity giant has recently shown an interest in fast-growing young companies, striking deals to invest in the highflying start-ups Airbnb and Uber.
In Chobani’s case, however, TPG is extending what is known as a second-lien loan, which, in the event of a default, would put TPG behind other creditors in collecting payments. Up to this point, Chobani has been financed through bank debt.
The warrants, which are tied to certain performance targets, could give TPG an equity stake as small as roughly 20 percent if the company performs particularly well, the people said. TPG is making the investment through its private equity arm, known as TPG Capital, and its credit platform, TPG Opportunities Partners.
A representative of TPG is expected to join Chobani’s board.
“Hamdi and the team at Chobani have in seven years turned the vision of bringing a quality, nutritious Greek yogurt to America into a highly successful business,” James Coulter, a co-founder of TPG, said in a statement. “We look forward to Chobani’s future growth and expansion of the brand.”
Chobani, which is based in New Berlin, N.Y., and has a manufacturing plant in Twin Falls, Idaho, has gained political allies in New York, who have embraced yogurt production as a booming business.
Chobani was advised by Bank of America Merrill Lynch and the law firm Kirkland & Ellis. TPG was advised by the law firm Ropes & Gray.