S4B manages a chain of 24 cafes across major cities in Poland and owns the largest specialty coffee roastery in the market, located in Wroclaw. In addition to serving customers in cafes, it supplies coffee to B2B clients, including offices. Entity aims to transform into an all-day lifestyle cafe, catering to high-traffic periods throughout the day and offering a wider range of services more conveniently. This new concept, is already in the process of being implemented and shows expected improvement in results in transformed stores. 

Mercaton SICAV decided to invest in the project due to: 

1. Growing Coffee Market: Coffee consumption in Poland is increasing, with a rising demand for specialty coffee and the expansion of café chains like Starbucks, Costa Coffee, and local brands. Coffee-to-go and home brewing are also becoming more popular. 

2. High Potential For Scaling: the organisation is operationally ready to increase the number of stores through  

1. an M&A transaction (one acquisition target is defined and preliminary terms of the transaction are established) 

2.  opening new stores 

3. Special Situation: S4B and operating companies are struggling with liquidity problems and some are in a state of restructuring. This makes it possible to negotiate more favorable transaction terms. 

The company aims to increase scale of operations through several key initiatives: 

1. M&A opportunity: the possibility of acquiring a competitor to reach 47 Locations (to be 4th chain in Poland) 

2. Expanded Offerings: Addition of premium bakery items, lunch/dinner options, and enhanced leisure space. 

3. Higher Prices and Margins: Repositioning into a higher competition set with increased prices and profit margins. 

4. Brand Segmentation: Expansion under different store types to cater to different market segments (high street, offices, malls, suburban).