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Whitbread smells the coffee


Posted on 12 February 2015

Costa Limited, the operator of the nation’s favourite coffee shop brand, has bought Life Coffee Cafes Limited (“LCC”) in a multi-million pound deal advised on by Smith Cooper Corporate Finance.

Smith Cooper Corporate Finance advised LCC’s shareholders, Simon Berry and Mark Upton, on the sale of LCC to Costa Limited, which is a subsidiary of Whitbread plc.

Unusually, LCC operates 16 large, profitable Costa stores at retail parks and roadside locations rather than in the usual High Street locations.  These special locations are spread across the whole of Southern England from St. Austell to Dartford, and northwards as far as Wolverhampton. LCC was formed in 2005 and expanded quickly, now employing around 200 staff and recording sales approaching £10m.

Smith Cooper partner John Farnsworth described LCC as “a really high quality operation with a capable and highly professional management team” and described the sellers as “very accomplished businessmen who have skilfully engineered rapid growth whilst maintaining very high quality standards”.

Costa operates around 60% of UK stores itself, the remaining 40% being run by franchisees.  This deal marks the first time Costa has acquired a sizeable franchise business, a decision it considers on a case by case basis. David Crump, a Director of Corporate Finance at Smith Cooper said “Costa’s decision was undoubtedly influenced by LCC’s strong locations on retail parks and its drive-thrus, both of which align with Costa’s growth strategy”.

LCC’s owners have other property-related business interests and intend to concentrate their efforts on those.  Speaking of the transaction, Simon Berry commented Smith Cooper added great value to our sale process through their attention to detail in the Information pack, the forensic co-ordination of data and the management of the professional team”.

Joint owner Mark Upton added “they guided us through every step of the way in a co-ordinated and professional manner, thinking outside the box in dealing with the many challenges that face vendors in a sale process. It’s a journey for which you need to have confidence in the company advising you and I would recommend Smith Cooper to anyone selling a business”.

Costa is the UK’s leading coffee shop brand, and the fastest growing.  There are over 1,800 stores and 3,600 Costa Express machines in the UK.

Smith Cooper Corporate Finance is the UK market leader in advising on significant sized food and drink franchise transactions, having a track record of over 40 assignments in this sector.


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