The Sterling group, promoted by NRI businessman C Sivasankaran, has bought out the New Delhi-based Turner Morrison group's 65.45% stake in the coffee bar chain Barista Coffee Company for an undisclosed amount.
The group, which runs a Chennai-based coffee company called Fresh & Honest, will be the Tata group's new partner in Barista. A Subramanian, a Sterling group director, said that the deal was finalised on Friday. The Tatas hold 34.3% in the coffee chain through the group company Tata Coffee, which in turn is a subsidiary of Tata Tea.
When Tata Coffee acquired a 34.3% stake in Barista Coffee Company for Rs 26 crore in '01, the enterprise value of the company was pegged at around Rs 76 crore. ET had reported on February 27 that Mr Sivasankaran is in negotiations to buy out Turner Morrison's group stake in Barista.
Industry sources said Barista and Fresh & Honest will now integrate their businesses. While Barista is an upmarket Espresso coffee bar on the lines of Starbucks, Fresh & Honest, with a turnover of close to Rs 50 crore, caters to a large number of corporate clients.
A major chunk of revenue of the Chennai-based coffee chain comes from vending machines installed at corporate offices. The company's clientele includes large corporates like IBM and Citibank.
The new alliance comes when Barista is expanding its global operations in markets such as Dubai and Sri Lanka. Barista, which faces stiff competition from chains like Cafe Coffee Day, has created a sub-brand called Barista Experience.
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