Second Cup just bought a local coffee chain for $10 million
The Second Cup Ltd. announced its new operating structure and strategy last month, and this is the company's first acquisition since that announcement.
Bridgehead has nineteen coffee shops in Ottawa, including its landmark Roastery, and each location serves fresh food made daily in addition to their fair trade and organic coffees.
Good decision by Second Cup to purchase Bridgehead. It was a popular coffee chain when I was in Ottawa. https://t.co/WKnnVdPTlM— Michael Taube (@michaeltaube) December 5, 2019
Their head office will remain in Ottawa following the acquisition.
"We created Aegis with the vision of building a portfolio of amazing brands that can grow and flourish with access to our resources and expertise," said Steven Pelton, CEO of Aegis Brands, in a statement.
"Bridgehead is the quintessential 'amazing brand' — a company with a deep sense of purpose, strong roots in its community and an incredible potential for growth. We're so excited to work with the team at Bridgehead to help fuel that growth in the months and years to come."
So the parent company of Second Cup, as part of its strategy to diversify beyond coffee… bought Bridgehead.— Andrew Snowdon (@snobiwan) December 5, 2019
All nineteen locations are corporately-owned and will maintain their original names.
According to the statement, of the $9.5 million that Aegis Brands is set to pay, $5 million is cash and $3.5 million is payable in Second Cup shares.
The statement also explains that any additional earn out payments will be made based on the profitability of Bridgehead's existing coffeehouses over the next two years. If profit targets are achieved, the payments would total an additional $1.5 million.
The transaction is expected to close later this month.
It's kind of a bummer to read that Bridgehead has been bought by Second Cup.— Dave Brown (@davebrownradio) December 5, 2019
Yes, yes. A regional chain is still a chain, but I always liked the vibe in Bridgeheads. All the new Second Cups are too bright. I like my coffee shops the same way I like my coffee, as dark as possible
In terms of leadership roles, current COO of Bridgehead Kate Burnett will assume executive leadership of the company while Tracey Clark, Bridgehead president and CEO, will hold a new role as Chief Culture Officer.
"Aegis Brands will offer Bridgehead opportunities in real estate and capital that we would not have been able to access on our own, and give us the autonomy to grow our business according to our values," said Clark.
"This partnership also presents incredible opportunities for our team, who are as excited as I am to serve new communities here in Canada, and to expand upon Bridgehead's positive impacts in coffee growing communities."
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