3.4x / 22% IRR
Branded coffee bars
Espresso House was a small but leading coffee bar chain, with 22 sites, 200 employees and a strong market position in the southern Malmö/Lund region.
The branded coffee bar phenomenon, which experienced extraordinary growth in the US and UK, had yet to mature in continental Europe. Palamon was looking across Europe for an entry point and identified Sweden, which consumed almost four times more coffee than the UK per capita, and yet but with a very low penetration of branded coffee bars. Palamon could see the opportunity to build Espresso house into the leading Scandinavian coffee bar chain with over 100 units in Sweden.
Espresso House was by far the leading coffee chain in the Nordic region with 122 outlets in Sweden and a nascent presence in Norway. The company achieved compound annual growth rates of 31% in revenue and 41% in profitability during Palamon’s ownership and employed 1,300 staff.
On 27 September 2012Palamon sold its shareholding in Espresso House to Herkules Kapital. The transaction generated a 3.4x return on invested capital and 22% IRR.