Longreach buys another Japanese coffee shop chain

The size of the investment was not disclosed, but Longreach typically pursues control buyout deals in the $50 million to $250 million range. The firm is currently deploying its third fund, which closed last April with $650 million in commitments. This is the fourth investment from that vehicle.

One of the others is Kohikan Corporation, which Longreach purchased through a carve-out from UCC Foodservice Systems in 2018. Kohikan had 277 stores at time of acquisition, making it the second-largest full-service coffee shop chain in the country after Komeda Holdings. Caffe Veloce occupies a different segment of the market, following a Starbucks-style self-service model.

Chat Noir also has several smaller brands, including full-service coffee shop players Coffee House Shanoir and Cafe Sejour, cafe-bar concept Cafe La Corte, crepe restaurant Yellow Marks, and izakaya chain Agetout. The company opened its first outlet - under the Coffee House Shanoir brand - in 1965.

The private equity firm believes Chat Noir is well-positioned to benefit from growth in Japan’s premium coffee store market. It will support the business through initiatives such as menu enhancement, new marketing campaigns, and regional expansion within Japan, according to a statement.

Longreach – which targets the industrial and technology, business services, and consumer sectors – also has exposure to food and beverage through Wendy’s Japan. It acquired the master franchise in 2016 and merged it with First Kitchen, a local restaurant operator with 136 locations. So far, 48 have been converted to the Wendy’s First Kitchen model, which combines the Wendy’s burger and First Kitchen menus.

First Kitchen is a UCC customer and this relationship was helpful in sourcing and negotiating the Kohikan deal.

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• Topics
• North Asia
• Buyouts
• Consumer
• Japan
• The Longreach Group Limited