Barista to get Italian flavour

LAVAZZA, the Italian king of espresso, is all set to take over Barista, the coffee cafe chain owned by C Sivasankaran, for about $110-125 million, people close to the development said. Senior officials from Lavazza, the storied 112-year-old coffee firm, will probably sign the deal in India some time next week. The purchase will include Barista’s cafes across the country and also Fresh and Honest, the coffee vending machine business. The combined turnover of the two businesses is estimated at about Rs 160 crore. Fresh and Honest has sold about 3,000 vending machines across the country, while Barista is believed to have about 150 cafes. Standard Chartered Bank advised C Sivasankaran, while Lazard acted on behalf of Lavazza. Mr Sivasankaran did not respond to an e-mail questionnaire on the issue. The group had put the business on the block upon realising that it needed substantial cash infusion to stay ahead of competition. Mr Sivasankaran had bought the business from Turner Morrison in April 2004 and then bought out the Tata group’s stake the same year. Though the brand had a strong recognition, the coffee cafe business struggled, especially against nimble-footed competitors such as Cafe Coffee Day. The business posted a reasonable turnover but profitability was always under pressure.

Courtesy: EconomicTimes
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