Campos Coffee acquisition highlights international interest in Aussie SMEs

Source: supplied.

Aussie coffee roastery Campos Coffee has been acquired by listed multinational giant JDE Peet’s, almost 20 years after it opened its first Sydney cafe in 2002.

Headed up by founder Will Young, Campos is now served in some 600 cafes throughout the country.

The value of the acquisition has not been disclosed, and the deal is still subject to pre-closing conditions. It is expected to be finalised some time next month.

In a statement, Young said he and the team are “incredibly proud” of what the business has achieved so far and the acquisition will allow the brand to “further unlock its true potential”.

He pointed to JDE Peet’s growth in the Australian and New Zealand markets, which is put down to its respect for the heritage of local brands.

“We are confident that Campos can and will continue to grow under their stewardship by continuing to focus on … high quality coffee and great service to our café partners,” he said. 

Campos Coffee is just the latest in a swathe of high-profile Aussie acquisitions by international players.

In April, Allpress was acquired by international drinks giant Asahi, and just weeks ago SMS marketing tech company Message Media was acquired in a huge $17 billion deal.

Professor Gary Mortimer, a retail and marketing expert at the Queensland University of Technology, puts this partly down to the way the Australian economy has performed throughout the COVID-19 pandemic.

“It’s still a pretty robust small business market,” he tells SmartCompany.

A fairly strong economy paired with good consumer confidence means Australian SMEs are “certainly an attractive target for global players”, he adds.

For the small business owners, such deals represent an opportunity to grow your business fast — something that often requires a considerable capital injection. They can also bring in additional management or market expertise.

The Aussie M&A boom

Following the MessageMedia acquisition, corporate finance partner at Pitcher Partners Michael Sonego noted that M&A activity in the tech space was on the up.

That’s partly because the pandemic highlighted the need for tech in our day-to-day lives, he told SmartCompany at the time. But it’s also because tech deals are easier to get across the line remotely.

For smaller businesses, there are many sectors that are piquing the interest of investors.

For example, the past few years have seen considerable activity in the fast-growing craft beer sector.

Whether we’re talking about speciality coffee, specialty beers or food and beverage businesses, it’s not necessarily about the product. It’s about the type of business, the market dynamics and noting shifts in consumer behaviour, says Mortimer.

“All of those types of businesses become quite lucrative for global players to access,” Mortimer says.

“It essentially expands their market reach.”

So can we expect to see more of the same?

Sonego predicted the number of tech acquisitions would likely increase in the second half of the year. In the SME space, Mortimer is a little more reserved. He expects to see a continuation of the momentum, but not necessarily an acceleration.

“If history is anything to go on, I would imagine we would see the same level of activity of mergers and acquisitions of small businesses,” he says.

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