THE chief executive of Matthew Algie has declared the historic Glasgow coffee roaster is poised for rapid expansion after being bought out in a deal likely to be worth tens of millions of pounds.
The 152 year old company, which has 220 staff and supplies coffee to hotels, bars and restaurants in the UK and Ireland, has been acquired by Tchibo, the German coffee giant.
READ MORE: Profit rise at coffee roaster Matthew Algie
The value of the deal was not disclosed. However, with Govan-based Matthew Algie reporting pre-tax profits of £3.4 million in its most recent financial year, on revenue of £33.7m, it would seem likely the deal was valued at tens of millions of pounds. The latest accounts for Matthew Algie show the company had net assets of £14.3m at December 31, 2014.
Gary Nicol, chief executive of Matthew Algie, said: “It’s fair to say it was a reasonable consideration. I can’t disclose anything at all.
“We’ve been profitable and successful because of our integrated service, product and coffee offering to our customers, and we are the largest independent coffee roaster in the UK, so it was a reasonable deal.”
Matthew Algie has been run by the family trust of David Williamson, the company’s former managing director, who died aged 42 in 2008 following a short illness. Mr Williamson had been the sixth generation owner of the business, which was founded in 1864.
Mr Nicol said the decision was made by the trust and the directors sell to a commercial shareholder to give the company the platform to expand. He said: “Periodically, they review their investment and approach and we had come to the joint realisation that to go forward and expand the business, it would take a bigger shareholder or a commercial shareholder, as opposed to individuals and a trust and estate. That would enable us to grow and we’re fortunate that we have found a great coffee partner at the end of the day.”
He added: “The timing was right, it was as simple as that.”
All of Matthew Algie’s staff and management team will remain with the business further to the deal, while the Matthew Algie brand will also be retained.
Mr Nicol said: “When we went into negotiations, a significant concern of our trustees, the board and management was to retain jobs here in Glasgow, and that is very much going to happen. They are very committed to that and hoping to expand production here in Glasgow, which is great news for us all.”
READ MORE: Profit rise at coffee roaster Matthew Algie
Mr Nicol noted that Tchibo had been attracted to Matthew Algie’s ethical stance – it launched the UK’s first triple certified espresso (Fairtrade, organic and Rainforest Alliance) in 2004 – its staff and its technical expertise. And he raised the prospect of Tchibo expanding its warehouse at its headquarters in Govan, where the Matthew Algie training facility and 120 of its employees are based. Noting that Tchibo does not currently have a roasting operation for the UK, he said such a move would provide the platform to build sales in Europe. “Tchibo have a very big internet and indeed on the ground operation in Europe and Germany,” said Mr Nicol.
While the Brexit vote in June’s EU referendum had been discussed during the takeover talks, which began “long before” the poll, Mr Nicol said that ultimately it was not viewed to be a big issue. “Tchibo are a privately owned company and clearly they take a long-term view, which is one of the reasons why we thought they would be a good investor,” he explained. “They are interested in Matthew Algie’s brand, the fundamentals of the deal and what we bring to the equation.”
Asked how important it was for the Matthew Algie name to continue, Mr Nicol said: “Our customers have been very positive about this. It is fair to say Tchibo have been really impressed by everyone at Matthew Algie… their enthusiasm, coffee knowledge and passion for the product, and also the wonderful facilities and technical provision we have here in Glasgow.”
READ MORE: Profit rise at coffee roaster Matthew Algie
On trading generally, Mr Nicol said: “We’re well up this year, it’s fair to say, and we’re hoping for another good year, particularly with the complementary nature of our businesses. There’s not much overlap – we’re hoping to expand business even quicker than we were.”
Tchibo said the acquisition would allow it to expand its coffee operation in the UK and Ireland, which serves forecourts, hotels and offices and currently has about 150 staff.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here