London-based coffee chain Caffe Nero has acquired Compass Coffee for $4.75 million, rescuing the DC-born cafe from collapse after it filed for Chapter 11 bankruptcy protection in January.

Founded by two former US Marines – Michael Haft and Harrison Suarez – 10 years ago, Compass struggled with rising rents and increased competition.

The bankruptcy filing revealed the company faced several lawsuits from landlords over unpaid rent. At the time, Compass said it would close 11 of its 20 locations and seek a buyer to stabilise the business.

“This really signals the immense challenges facing independent coffee shops in cities like DC,” local retail analyst Sarah Jenkins told Coffee Geography Magazine.

“Rents are astronomical, and the competition is fierce. It’s becoming nearly impossible for a local chain to operate independently. Being acquired by a larger, financially stable company like Caffe Nero may be the only viable path to survival.”

Founded in 1997 by American entrepreneur Gerry Ford, Caffe Nero now operates more than 1000 locations across 11 countries. It entered the US market in 2014 with its first store in Boston, promoting a slower, ‘European-style’ coffee experience.

“Compass Coffee built something special in DC,” Ford said.

“We see this not as a takeover of a competitor, but as an opportunity to invest in a market we believe in and preserve the best of what Compass has built.”

Caffe Nero plans to keep all 17 Compass locations under their current name, “for the time being”.