Coca-Cola closer to sale of Costa Coffee – reports
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The Coca-Cola Company is said to have received a bid from Bain Capital’s Special Situations division for its well-known café chain, Costa Coffee. Established in London in 1971 by brothers Bruno and Sergio Costa, the business started as a wholesale operation providing roasted coffee. The coffee chain caught the attention of Whitbread, which acquired the business in 1995. Later, in 2018, Costa Coffee was sold to The Coca-Cola Company for roughly £3.9 billion, equivalent to approximately US$5.1 billion at the time of the transaction.
Bain Capital’s Bid
The Special Situations unit of Bain Capital, which has previously invested in British bakery and café chain Gail’s as well as restaurant chain PizzaExpress, has proposed an initial bid for the UK-based coffee chain. Besides Bain, private equity firm TDR Capital has also expressed interest in the deal.
Costa Coffee’s Global Presence
Costa Coffee has grown significantly since its establishment, expanding its presence to over 50 countries. It currently maintains more than 2700 stores across the UK and Ireland and operates in more than 1300 locations in other global markets.
Challenges Amidst the Pandemic
Despite its global reach and popularity, Costa Coffee has grappled with increasing costs and a decline in consumer spending due to the Covid-19 pandemic. The café chain reported an annual loss of £13.8 million and revenues of £1.2 billion in 2023.
Bain Capital’s Recent Acquisitions
Bain Capital has a history of acquiring food and beverage establishments. For instance, the firm purchased the restaurant franchise growth platform Sizzling Platter in July, which operates several well-known brands such as Little Caesars, Wingstop, and Dunkin’.
Questions & Answers
Who initially founded Costa Coffee and when was it established?
Costa Coffee was established by brothers Bruno and Sergio Costa in London in 1971.
Who submitted a bid for Costa Coffee?
The Special Situations unit of Bain Capital has reportedly submitted a bid for Costa Coffee.
What financial impact did the Covid-19 pandemic have on Costa Coffee?
Due to the pandemic, Costa Coffee has faced a decline in consumer spending and rising costs, resulting in an annual loss of £13.8 million in 2023.