Caffè Nero Group has bought a majority share in Coffee#1, the café chain developed by pub group SA Brain for an undisclosed sum.
Coffee#1 opened in 2001 and now has 92 shops in Wales, the Midlands, and the south of England, with annual sales of £30m.
It has been owned by Welsh pub firm and brewer SA Brain since 2011. It has now sold the majority of its stake in the business but will retain 30% ownership.
The Coffee#1 brand will sit alongside the Caffè Nero's other brands: Caffè Nero, Harris+Hoole and Aroma.
Caffè Nero, which now has 750 stores in the UK and over 1,000 internationally, said it planned to leave the Coffee#1 brand intact and to operate it as a standalone business.
Founder and group CEO Gerry Ford said: "We're delighted to welcome Coffee#1 into the Caffè Nero family. It is a fantastic brand with an emphasis on great coffee and service combined with a local community-based feel which matches perfectly the ethos of the Caffè Nero Group. Coffee#1 will continue to operate regionally and grow alongside the Caffè Nero brand."
John Rhys, chairman of SA Brain said: "I am proud of what we have achieved in growing Coffee#1 to 92 stores since we acquired the business seven years ago. I would like to thank our employees and everyone involved for making it such a resounding success.
"The Board has resolved that now is the time to join-up with a major player in the coffee market to take it forward to the next stage of its development. As ongoing significant shareholders in the business, we look forward to seeing Coffee#1 continue to grow and prosper within the Caffè Nero family over the coming years."Get The Caterer every week on your smartphone, tablet, or even in good old-fashioned hard copy (or all three!).