Posted on 8 February 2016
Purple World Limited, the operator of 10 Costa Coffee outlets in Cumbria and North Lancashire, has recently been sold to Red and Racz Limited, a new company set up by private investors with existing businesses in food retail brands such as Domino’s and Nando’s.
The multi million pound deal was initiated, and full deal management services were provided to the Seller, by the Corporate Finance division of Midlands based accountancy and business advisory firm, Smith Cooper.
The Seller, Kay Berry, was one of the first few pioneering Costa franchisees globally, opening the first store in October 2005 in Fleetwood, having left a promising career in local government. Kay commented “the decision to become a Costa franchisee was not easy; I had been offered a significant promotion by my employer and the Costa opportunity was, at that time, just a fledgling concept that was largely unproven. The decision was right however and I have thoroughly enjoyed building Purple World into a leading business in the, now iconic, Costa brand”.
Red and Racz Limited was set up to make the acquisition by Mike Racz and Arvi Salariya, both of whom operate very successful, fast growth Domino’s franchises in the UK. Mike also has property, fitness and social media management businesses whilst Arvi has a majority stake in 3 Nando’s stores in Delhi, and operates an IT/technology equipment and video games businesses.
Smith Cooper operates from 7 offices and employs 180 staff. The corporate Finance division ranks in the top 10 in the Midlands and has a number specialisms, including franchise where it dominates the UK fast food and drinks sector. Head of Corporate Finance, John Farnsworth, commented: “I am delighted to have secured an exit for Kay and have no doubt Mike and Arvi will be very good for both Purple World and the Costa brand”.
Commenting on the deal, Kay said “I had really no idea about the process nor indeed how emotional, stressful, tiring and frustrating it could be and I have huge admiration for the team at Smith Cooper Corporate Finance who do this day in and day out! I absolutely could not have got the deal I did without Smith Cooper on the team. I have the utmost respect and appreciation for their tireless, relentless and dogged determination to get the deal done. They showed consummate professionalism, utter dedication and, above all, good humour in achieving our goal. I have no hesitation in recommending their services.”
Costa Coffee is a global business operating in around 30 countries and is owned by Whitbread PLC. It dominates the UK coffee shop market with approximately 1900 stores, about 40% of which are franchised, and operates around 4000 Costa Express machines. Whitbread plans to grow worldwide store numbers by 200 in 2016 and is targeting £2bn of global sales by 2018 Coffee.