Hutton Collins has led GBP99 million of subordinated facilities in the refinancing of coffee house chain Caffè Nero. Under the terms of the investment, Hutton Collins has arranged GBP99 million of mezzanine and PIK financing which has been held by Hutton Collins Capital Partners III, Goldman Sachs European Special Situations Group and Bayside Capital.
The financing will be used by Caffè Nero, headed by Gerry Ford, to refinance existing facilities and to position the Company for further expansion. The company currently has over 440 coffee houses in the UK and expects to open an additional 50 stores per year.
Caffè Nero – currently the UK’s third-largest chain of coffee houses with approximately 3,200 employees – has performed extremely well over the last three years, delivering 54 consecutive quarters of positive like for like growth. EBITDA for the 12 months to May 2011 is forecast at GBP31 million, an increase of 10% on the previous year. Top line revenue for the same period is forecast to reach GBP171 million, an increase of 11% on the previous year.
This is Hutton Collins’s third growth capital deal in the past 12 months following investments in IT services company 2e2 and satellite communications provider Vizada. It represents Hutton Collins’s sixth investment in the leisure sector since 2002.
“We are delighted to return to the leisure sector through Caffè Nero," says Eric Bellquist, partner at Hutton Collins. "Hutton Collins’s investment provides the company with a financial structure more appropriate for its growth ambitions as it continues with its expansion plans and accelerates its roll out, both in the UK and internationally.”
