Palamon Capital Partners, one of Europe’s leading mid-market private equity firms, has agreed the sale of the largest chain of wholly-owned branded coffee bars in the Nordic region, Espresso House, to Herkules Private Equity III, a Norwegian private equity fund, for an undisclosed sum. Palamon acquired a majority interest in the then 22-strong Espresso house in 2005. A year later it acquired a 15-store chain in Stockholm to create a national brand with 37 outlets. From that base, the company embarked on an organic expansion plan, which has taken it to 120 outlets across Sweden. During Palamon’s ownership, revenues increased by 30% per annum to SEK560m (£52.4m) with EBITDA rising more than 10 times. Dan Mytnik, Partner at Palamon, said: “We could not be happier with the success of Espresso House. From small beginnings, we have enjoyed partnering the company’s superb management team in developing a growth strategy and executing to create a leading brand with the dominant position in its segment. For us, this investment has returned 3.4x on invested capital, once again demonstrating the power of our thesis-led investment approach. We wish the company well as it embarks on its next stage of growth.” Adriano Capoferro, CEO of Espresso House, said: “Palamon’s support and strategic insights were significant at the early stages and then throughout the roll-out of our expansion plans. We have greatly appreciated our close collaboration with the Palamon team, which has been an essential component in the Company’s success. Over the last year we have successfully opened 20 more outlets, continuing the steady increase of our presence in Sweden and laying the base for our exciting expansion plans into neighbouring Nordic countries.”