SA Brain, the Cardiff-based brewer and pub operator, has bought the 15-strong high street coffee chain Coffee#1 for an undisclosed sum. The acquisition, which marks a major departure for the company, follows last week’s news that Brains has secured a new funding package with Lloyds Bank Corporate Markets and HSBC Corporate Banking, which includes a £70m revolving credit facility with equal funding from both banks, plus a £7.5m facility from Lloyds Bank Corporate Markets. Coffee#1 has outlets spread throughout South Wales and the south west of England. Brains’ chief executive Scott Waddington said: “The coffee market has continued to grow strongly despite the recent difficult economic conditions. We believe that with the continuing changes in consumer eating and drinking habits, this acquisition presents an obvious opportunity for our business in the future and is complimentary to the continued development of our pub business. “We are selling an increased volume of coffee through our pub estate and believe we are well placed to continue the fantastic success of Coffee#1 with our complementary hospitality skills to a well-established, highly-regarded and award-winning retail operation. "We have been very impressed with the excellent standards of product quality and service and were attracted to the significant development potential for Coffee#1 going forward.” James Shapland, managing director of Coffee#1, said: “We are delighted that Coffee#1 has become part of the Brains family and are confident that under their control the business will go from strength to strength.” Gary Partridge from PricewaterhouseCoopers’ Deal Team, which advised Coffee#1’s shareholders, said: “This deal demonstrates that the local M&A market is open for entrepreneurial-backed businesses such as Coffee#1. Coffee#1 is a strong brand and leading regional coffee chain, and PwC is delighted to have advised James and the shareholders on this transaction.” Brains currently operates c.240 pubs. Last week Waddington told M&C Report that the company is likely to resume its expansion programme of opening between eight and 12 sites a year, and look beyond its heartland.