Sale plans could be brewing for SA Brain coffee business

SA BRAIN & Co is considering a potential sale of its fast-expanding coffee business, Coffee #1.

The Cardiff-based brewing and hospitality business has appointed City of London advisory firm Sapient to look at strategic options, including the firm only selling a minority stake in the business. SA Brain & Co acquired Coffee#1 in 2011 from entrepreneur James Shapland.

City sources said several private equity firms have expressed interest in the business, which could be worth up to £60m.

A SA Brain & Co spokesman said: “Coffee#1 is an amazing success story and a leader in its field. As you would expect, the board continually considers strategies and opportunities to maximise the growth potential of the business. One strategy which SA Brain is considering currently is to seek a potential partner to provide further development capital to expand our successful Coffee#1 business through to the next stage of its growth. SA Brain intends to remain a committed shareholder in the business, which currently comprises 77 premium-branded, artisan coffee shops. Beyond that, we will not comment further.”

Talks at are an early stage and could result in SA Brain & Co not pursuing any sale, or part sale, of the business.

The family-owned business, which has a workforce of around 2,200, saw revenues for the year to October 1, 2016 up 7% on the previous year to £135m, while operating profit was up 23% to £5.5m.

Revenues at Coffee#1 rose 28% during the year. Its sales now account for close to 20% of all SA Brain revenues. Coffee#1 was recently named Coffee Chain of the Year at the Café Life Awards for the seventh time in eight years.