Bargain Booze owner Conviviality Retail has agreed to acquire drinks supplier Matthew Clark for an enterprise value of £200m.
The acquisition constitutes a reverse takeover, as Conviviality Retail is the smaller of the two companies, and so is conditional on obtaining shareholder approval on 24th September.
The acquisition is expected to enhance earnings from the first full year of ownership and create a major UK drinks wholesaler with combined annual sales of over £1.1bn.
In the year to 28th February 2015 Matthew Clark, which is the biggest supplier to UK pubs, generated a £2.53m profit on sales of £811.2m.
Conviviality’s directors believe that “potential exists for significant synergies to be realised from the combination of the two businesses”, with potential synergies from buying, distribution, organisational efficiencies and additional revenue generation.
Conviviality Chief Executive Officer, Diana Hunter, said: “We are pleased to have reached agreement on the acquisition of Matthew Clark as this will accelerate our strategy of expanding our wholesaling expertise into new markets and channels. Matthew Clark has a leading position in the independent on-trade market, complementing Conviviality's position in the off-trade, and the team bring significant on-trade wholesaling expertise and an unrivalled portfolio of high quality and loyal customers.
By operating a delivered wholesale model we can serve a diverse range of customers and build our wine and spirit volumes further while simultaneously strengthening our retail channel. The acquisition will create a major player in the UK drinks wholesale market, and we believe that combining the two businesses will give rise to significant potential synergies, which will drive increased returns for Conviviality's shareholders.”