Friday 22 June 2018

Shares in Bulmers owner C&C soar as it seals deal for UK distributor

Bulmers owner C&C will acquire gross assets of €263m when the deal is completed
Bulmers owner C&C will acquire gross assets of €263m when the deal is completed
John Mulligan

John Mulligan

Bulmers-maker C&C has agreed to buy UK drinks distributor Matthew Clark and Bibendum, the largest independent distributor to the UK's on-trade sector, in a pre-pack administration deal.

Shares in C&C soared more than 10pc yesterday on news of the transaction.

C&C is buying the business with the support of AB InBev, the world's largest brewer, which owns brands including Budweiser and Corona.

C&C will pay only a nominal sum for the business, which will be run as a separate entity.

An administrator was set to be appointed yesterday afternoon to Matthew Clark and Bibendum's parent firm, Conviviality Brands, which also owns the Bargain Booze chain.

The Bulmers owner said that it will provide sufficient funds to support the continuing working capital and other cash requirements of the business. InBev will provide additional financial support for the transaction, while C&C's investment will be funded from the group's existing facilities.

"At completion, Matthew Clark Bibendum will have £102m of working capital facilities provided by its current lender group, repayable in instalments over the 12 months following completion," noted C&C, which also owns brands including Tennent's.

Gross assets of approximately £230m (€263m) are expected to be acquired at completion.

The Matthew Clark and Bibendum business also includes Catalyst, a brand representation business, and Peppermint, an outdoor events business.

C&C CEO Stephen Glancey said that the Matthew Clark and Bibendum businesses have "unparalleled on-market trade access" and acknowledged that the past number of weeks have been "challenging" for the firms and their employees.

"We look forward to working with our new colleagues and other stakeholders to bring stability and restore the group's position as one of the leading and most respected drinks suppliers to the UK hospitality sector," he said.

In the financial year to the end of April 2017, Matthew Clark and Bibendum posted gross revenue of £1.2bn (€1.37bn) and adjusted earnings before interest, tax, depreciation and amortisation (ebitda) of £51.3m (€58.7m). Conviviality recently said that it expected adjusted ebitda of the entire group to be between £45.5m and £46m in the current financial year.

C&C said the acquisition would create the leading independent route-to-market network across Britain and Ireland, alongside C&C's existing drinks wholesaling business.

It added that it would also enhance access for C&C's cider and super-premium brands across the on and off-trade in the UK.

C&C also owns a 47pc stake in UK pub chain Admiral Taverns.

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