Former Second Cup Coffee Co. owner secures new line of credit from CWB Franchise Finance to acquire more Canadian food and beverage brands
A Bridgehead coffee shop in Ottawa, Canada | Photo credit: Matti Blume CC BY-SA 4.0
Aegis Brands has secured CA$28m ($22.2m) development line of credit (DLOC) from CWB Franchise Finance, a company specialising in Canadian hospitality brand investments.
According to a press release, Aegis will use the funds to finance the acquisition of Canadian food and beverage brands to grow its presence in the market.
"Not only does this line of credit give us the ability to acquire great brands in the F&B space, but it is also an acknowledgement of Aegis's strategy of assembling great brands, and great leaders and allowing them to grow with our support,” said Steven Pelton, President and CEO of Aegis Brands Inc.
The new investment comes after Aegis Brands completed the sale
of Canadian coffee chain, Second Cup, to restaurant group Foodtastic for around CA$14m in April 2021.
Aegis, which reported a CA$1.8m third quarter loss in September 2021, retains control of coffee roaster and retailer Bridgehead and cannabis retailer Hemisphere.
Bridgehead showed improved trading over the quarter, with sales climbing 19% and net losses narrowing to CA$209,000 compared with CA$937,000 for the same period in 2020. E-commerce and wholesale represented 19% of Bridgehead’s year-to-date sales, with the company focusing on online and wholesale sales channels as well as its two coffee shops to support further growth.
"The company's success with Bridgehead is a testament to their commitment to the industry. We look forward to strengthening this already beneficial relationship as they continue to grow," said Jacob Mancini, Assistant Vice President, Restaurant & Brewery Finance at CWB.
Canada’s branded coffee shop market
contracted by 22% in 2020 and is estimated to be valued at around C$9.5bn (US$7.5bn). World Coffee Portal forecasts the Canadian coffee shop market will return to growth in 2023.