Whitbread, the leisure group, has announced the acquisition of Coffee Nation, the vending machine operator, for £59.5m.
The operator of the Costa Coffee brand said it would launch a new brand, Costa Express, on the back of the acquisition, which allows it access to new types of location and creates a growth opportunity in the UK's emerging self-serve coffee bar sector.
The UK's self-serve coffee bar sector currently comprises c.2000 units of which Coffee Nation operates 900, including tie-ins with Tesco, Moto and Welcome Break.
Costa said it will use the purchase of Coffee Nation to develop Costa Express and is targeting 3000 bars across the UK over the next five years, capable of quadrupling its profit contribution. The chain currently operates over 1850 stores, 1200 in the UK and a further 650 internationally.
Andy Harrison, chief executive of Whitbread, said: "Customers increasingly want great tasting coffee on the go, which makes the self-serve coffee market very attractive. This acquisition provides an exciting launch pad to develop 3000 Costa Express bars across the UK, providing an additional growth lever for the Costa brand and making Costa available to more customers in more locations."
