M&G orders up Caffé Nero

The European coffee chain received £30 million in debt financing from the firm. 

M&G Investments has provided £30 million in debt financing to European coffee shop group Caffé Nero, the firm announced in a statement Tuesday.

M&G provided the financing through one of its direct lending funds, UK Companies Financing Fund 2. That vehicle has received the backing of the UK Government through the Business Finance Partnership, Prudential and UK pension funds, according to a statement.

Caffé Nero’s financial performance has improved dramatically over the last several years. UK-only EBITDA grew from £31.6 million to £34.9 million over the last fiscal year, according to its website. Total revenue expanded from £199.1 million to £227.9 million.

The capital provided by M&G was part of a refinancing package Caffé Nero undertook to pursue further growth. The package includes financing from bank and non-bank lenders.

“M&G is the only non-bank lender participating in the senior debt of this financing deal with a mid-sized firm on a ‘club’ basis. We would expect the deals that we strike over the next year or so to be a blend of bilateral and club deals,” said M&G head of direct lending James Pearce in a statement. “Both bring their own benefits and we and our investors are happy to be flexible.”

An M&G spokesperson was unavailable at press time.