Whitbread: sells Costa Coffee to Coca-Cola

(CercleFinance.com) - Whitbread has signed an agreement to sell its Costa coffee chain to the American giant Coca-Cola, both groups announced this morning, for an enterprise value of 3.
9 billion pounds, or about 4.4 billion euros.

The UK hotel and catering group bought the Costa Cafes for 19 million pounds in 1995, which at the time only had 39 outlets. Costa currently manages 2,400 “coffee shops” in the UK and 1,400 in 30 other countries, plus 8,000 automatic coffee machines in eight countries.

Over the last fiscal year, Costa generated revenues of 1.3 billion pounds, reporting EBITDA of 238 million pounds and operating profit of 123 million pounds. The sale price therefore represents 16.4x EBITDA.

Whitbread expects net proceeds of 3.8 billion pounds in cash, of which "the majority" will be returned to shareholders. Whitbread will also use this money to reduce its debt.

The deal is set to be finalized in the first half of 2019.


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