Palamon has bought two Swedish coffee baroperators, Espresso House and Coffee Cup, fora combined SKr103m (11m).
The chains operate 37 coffee bars and will beintegrated under one name. An expansion plan willbe executed with the number of units increasing to50 by the end of the year and then by around 25 ayear over four years. Palamon intends to invest upto SKr150m in the expansion.
Palamon has acquired the whole of Coffee Cup,and a large majority share of Espresso House.Espressos founders retain a six percent stake.
Espresso House was established in Lund in 1996by Charles and Elisabet Asker and today operates22 coffee bars with sales of around SKr100m. CoffeeCup was founded in 1997 by Johan Wellander andMagnus Kallstrom and operates 15 units with salesof around SKr40m.
The Swedish market for coffee bars is growing atbetween 20 and 25 per cent a year. Despite the factthat coffee consumption per head is four times higherin Sweden than in the UK, the number of brandedcoffee bars per head in Sweden is four times lower.
The combined business of Espresso House andCoffee Cup will be headed by new chief executiveBjorn Krasse and new chairman Christian Beck,who were responsible for expanding the 7-Elevenchain in the Nordic region in the 1990s.