Spar retailer BWG bags ADM Londis in €23m deal
Retail group BWG - which controls the Spar franchise in Ireland - has agreed to pay €23m to buy the trading business of ADM Londis.
The acquisition will bring the Londis brand under BWG's wing, adding to a stable it already controls here, including the Spar and Eurospar symbols, as well as XL and Mace.
The deal also comes just five months after BWG sold an 80pc stake in its business to Spar South Africa.
BWG was acquired by its management, including chief executive Leo Crawford, for €390m in 2006 from private equity group Electra Partners.
Londis operates about 200 stores across the country and is owned by its member-operators. It generated sales of €195m in 2013.
Londis board members have indicated they will accept the BWG deal.
But the transaction will be subject to clearance from the Competition and Consumer Protection Commission, and the holders of at least 80pc of the issued shares of ADM Londis have to accept the deal.
BWG said it will be committed to the Londis brand and believes the acquisition will bring benefits to Londis retailers in areas such as shared purchasing, marketing and innovation.
BWG - once part of Pernod Ricard-owned Irish Distillers - generated sales of about €1.2bn in 2013 and directly employs over 1,000 people. Most of its sales come from its wholesale arm, which supplies retail outlets.
The company operates 1,175 Spar, Eurospar, Spar Express, Mace and XL symbol stores across Ireland and Britain, as well as a chain of 22 Value Centre cash-and-carry outlets.
Spar South Africa firm paid €55m for its stake in BWG, which had previously restructured its €300m debt pile.
In November 2013, BWG finalised a deal that saw that debt cut by €100m. Among the financial institutions involved were Bank of Ireland, AIB, Ulster Bank, Lloyds and US private equity house Blackstone.
Follow the stake sale to Spar South Africa, Mr Crawford and fellow BWG directors John Clohisey and John O'Donnell retained 20pc of the business. At the time of that deal, the Spar South Africa announced it would embark on a €100m expansion of BWG's business in Ireland over the next five years.
Mr Crawford said yesterday that BWG has "ambitious plans" for investment in conjunction with Spar South Africa.