Risk & Economy » Regulation » Financing success for Caffe Nero and Hall & Woodhouse

ITALIAN COFFEE COMPANY Caffè Nero has put together a £250m debt refinancing package.

The new debt facilities, which include £100m of senior debt instruments and £150m in junior ranking debt, will help the business push into international territories and the UK, plus open up new market channels, including ‘at home’ coffee.

The deal, which also includes £25m in capital expenditure and other facilities, will lower its cost of capital. The senior debt syndicate includes Santander, Rabo Bank, M&G Investments, HSBC and Lloyds. The junior syndicate consists of Partners, Avenue and Alcentra. Canaccord Genuity served as adviser to the company for the refinancing.

Gerry Ford, chairman and founder, said: “The Caffè Nero brand has outstanding growth prospects. This new debt package allows us to move into some exciting new areas and to continue with our strong store growth both in the UK and abroad.”

Caffè Nero operates through 600 stores across five countries (UK, Poland, Cyprus, Turkey and the UAE). It is a family-owned business started in 1997 by Ford.

It has been a busy month for M&G Investments. Alongside its work with Caffè Nero, M&G has lent £20m to Dorset-based Brewery Hall & Woodhouse. Partly backed by the government’s Business Finance Partnership, the deal enables the 240 year-old brewer to support its plan to acquire and develop pubs.

Martin Scott, finance director, Hall & Woodhouse, said: “The M&G direct lending team impressed us from the outset. They demonstrated a genuine passion for our business, flexibility in their approach and a willingness to invest heavily up front in getting to know everyone involved in taking us forward.”

Deloitte advised Hall & Woodhouse on the deal. Fenton Burgin, partner in the debt advisory team at Deloitte, said the deal was one of the first non-bank, long-term financings in the regional brewing sector since the financial crisis.

“Securing long-term, committed capital from one of the UK’s leading and longest established asset managers provides the company with considerable financial flexibility underpinning its continued success and the delivery of its long term objectives,” Burgin said.

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