Milestone led the transaction and provided the equity funding for the deal, while RBS provided the senior debt and future capex facilities. Investec provided the mezzanine finance in the deal.
About Coffee Nation
Coffee Nation was founded in 1999 and was the first to recognise that a shift in consumer tastes had created a demand for premium quality, gourmet coffee, then only available in coffee bars.
As a result Coffee Nation pioneered the original concept for self-serve gourmet coffee looking to combine premium quality barista coffee with the consistency, availability and ease of vending.
With an initial investment of £4 million from Primary Capital in 2000, Coffee Nation’s self-service coffee offering has since grown to 550 points of purchase in the country across motorway, petrol forecourt and convenience stores including Welcome Break, Tesco, Esso, Moto and Somerfield.
With sales of over 15 million cups of coffee each year, Coffee Nation is now achieving an annual turnover over in excess of £20 million.
Having secured a dominant market position and premier retail clients, the refinancing will allow Coffee Nation to:
• accelerate its growth in existing markets and expand its offering within identified air, rail, retail and restaurant sectors
• fast-track its innovation pipeline and introduce new self-serve products on to the market
• increase marketing activity and establish Coffee Nation as a leading gourmet coffee brand
• grow the dedicated customer department and continue to provide exceptional support for customers and consumers
Philip Conboy, Partner at Milestone commented:
“Coffee Nation is a fantastic business led by an exceptional management team with huge growth potential in a highly fragmented and growing market place. The business has now reached a stage in its life where it requires significant investment to grow and continue its roll-out program and that is where Milestone comes in.
“Milestone has enabled not only the change in ownership but also put in place significant funds that will flow into the business to facilitate its future growth and plans. We are also very excited at the prospect of promoting and enhancing the Coffee Nation brand that judging by market feedback is going from strength to strength.”
Scott Martin, CEO Coffee Nation commented:
“This is a great vote of confidence in our business. We have already proven that Coffee Nation is a successful business model.
“This additional investment from Milestone will allow us to break into new markets and further improve the productivity from our existing 550 sites.
“Our ambition is to turn Coffee Nation in to one of the leading coffee brands in Europe.”
Neil Wallace, Director at Primary Capital commented:
“We are extremely pleased to have been associated with the success of Coffee Nation, which is primarily due to the professionalism and hard work of a very talented management team and staff led by Scott Martin.
“We wish Scott and his team the very best under new ownership and look forward to seeing Coffee Nation go from strength-to-strength.”
About Milestone
Milestone is an independent Private Equity Fund owned and controlled by its partners, which manages over €400m and invests mainly in the UK and France. Milestone Capital seeks to identify and invest in experienced management teams with a strong track record.
Working in close collaboration and partnership with these management teams, Milestone Capital executives will deliver strategic business input and significant industry contacts, ensuring maximum business performance and strong long term shareholder returns.
About Primary Capital
Primary is an independent private equity firm with £360 million under management which invests in middle-market management buy-outs and buy-ins in the UK and continental Europe. Primary is currently investing its third fund, Primary III, of £200 million.
