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Whitbread adds to empire with £36m deal to buy Coffeeheaven
Costa owner Whitbread stepped up its expansion yesterday with a £36m deal to buy central and eastern Europe chain Coffeeheaven International.
Whitbread will add 90 coffee shops to its coffee empire after the acquisition, which is subject to shareholder approval.
It is not yet clear if the Coffeeheaven brand will remain after the takeover, although the business is set to operate as a subsidiary of Costa.
John Derkach, managing director of Costa, said: "This transaction will give Costa a strong position in the important and rapidly growing Central and Eastern European market."
Its bid is worth 24p per Coffeeheaven share – an eight per cent premium on Monday night closing share price, but around 25 per cent higher than shares were worth before bid interest was first revealed in June.
Richard Worthington, chairman of Coffeeheaven, said: "Since the opening of the first Coffeeheaven store in 2000, our vision has been to build a market leading chain of branded coffee shops across Central and Eastern Europe. The Coffeeheaven business should benefit from the substantial resources available to Costa and our staff will have the opportunity to work within a much larger group to continue to grow and develop the business."
Whitbread, which also owns Premier Inn budget hotels and a pubs restaurant division, has continued with the expansion of its coffee chain through the recession.
It added 100 new Costa shops in the six months to August 27 this year – bringing the total to nearly 1,000 stores in the UK and more than 400 overseas.
Costa currently only has "a handful" of stores in Poland run on a franchise basis, but the acquisition of Coffeeheaven will boost its presence there with 62 shops.
It also has 14 outlets in the Czech Republic and 14 shops across Bulgaria, Hungary and Latvia.
The firm, which trades as Coffee Nation in Latvia, is listed in London but based in Warsaw in Poland.
Coffeeheaven's most recent results for the six months to September 30 showed a doubling of underlying pre-tax profits to 200,000 on revenues up five per cent year-on-year to 12.5m.
The firm said on releasing the results that it had a 23 per cent market share in Poland and the country looked to be an economic "out performer" in Europe.
Its suitor Costa has been a star performer for parent Whitbread, which on Monday reported another "outstanding" performance for the chain after like-for-like sales growth more than doubled to 6.7 per cent in the first half.
The group was founded in 1971 and is now the largest coffee chain in the UK.
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Friday 25 May 2012
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