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South West Coffee Limited is sold in ground-breaking deal


Posted on 20 September 2013

South West Coffee Limited which operates 8 Costa Coffee franchises in the Bristol area has been sold to Kout Food Group in a multi-million pound deal advised on by Smith Cooper Corporate Finance (“SCCF”).

SCCF is the corporate finance unit of Midlands business advisers and accountants, Smith Cooper. Although advising in all sectors, SCCF has specialists in the QSR and franchise markets and this deal brings the total of such businesses advised on to well over 35. SCCF project managed the transaction for the Sellers, compiling a comprehensive information pack, valuing the business, identifying and negotiating with the Buyer and providing a full deal management service.

Commenting on the deal, SCCF Corporate Finance Partner John Farnsworth said “This transaction is ground-breaking in that it represents the first significant arms-length sale of a Costa franchise business in the UK; we spotted the maturing of this brand some time ago and expect the sales trend to sustain now.” David Crump, a Director in SCCF, added “we are delighted to have advised on this deal which further enhances our record in this sector, and look forward to continuing to work in the Costa arena.”

Since becoming franchisees in 2008, the Sellers rapidly built a dynamic and profitable business. Referring to the deal, the Sellers commented “this is a landmark transaction in the Costa brand, not just an important deal for us personally. The sector knowledge, contacts and experience of the SCCF team was clear from the start and they did a superb job for us; we would not hesitate to recommend them.”

The Buyer, Kout Food Group (“Kout”), is a Kuwait based PLC which is part of the Al Homaizi Group and operates over 130 restaurants in the Middle East. Kout has a London based UK subsidiary which already owned operations in Burger King, KFC, Cha Cha Moon, Maison Blanc, and added to these this month through the acquisition of Little Chef and this Costa business. It now runs around 160 restaurants in the UK.

This is the second business that SCCF have advised on in a sale to Kout; last year SCCF advised the sellers on the multi-million pound sale of Banquets of Oxford which operated 8 KFC restaurants.

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