Conviviality announced the extent of its troubles last month, revealing a crippling tax bill of £30m and a further £30m in debt to creditors.
What the deal will mean:
- Create the leading independent route-to-market network across the British Isles, alongside C&C’s existing drinks wholesaling businesses in the UK and Ireland
- Provide direct access to an incremental c23,000 predominantly on-trade customers across the UK, comprising leading hotels, restaurants, pubs, clubs and bars
- Enhance access for C&C’s cider and super-premium brands across the on and off-trade in the UK
- Strengthen the combined group’s procurement, supply and distribution capabilities for third-party wines, spirits, beer and soft drinks
- Enhanced access in the premium trade sectors, in particular London and the south-east, through Bibendum’s expertise in wine
- Significant revenue opportunities and other business benefits
- Significant earnings accretion and attractive returns on capital in the first full financial year following completion
- Strengthen relationships with and commitment from all stakeholders, including key suppliers
C&C is seeking to acquire the entire share capital of Matthew Clark (holdings) Limited and Bibendum PLB (Topco) Limited, along with Conviviality’s subsidiary brands Catalyst, Peppermint, Elastic and Walker & Wodehouse.
The proposed acquisition is conditional and dependent on the appointment of administrators to Conviviality Brands Limited, which is expected to happen today (4 April).
If the deal goes ahead, Matthew Clark and Bibendum will have £102m in working capital facilities provided by its current lender group, which will be repayable in instalments over the next 12 months, C&C said in a statement today.
Matthew Clark Bibendum
Matthew Clark and Bibendum, along with the subsidiary brands, will combine to become Matthew Clark Bibendum and operate as a separate business to C&C, which the company said will, among other things, create a leading independent route to market across the UK, as well as provide access to 23,000 on-trade outlets.
C&C Group CEO Stephen Glancey said: “We know the Matthew Clark and Bibendum businesses very well. They are great businesses with unparalleled on-trade market access, a wide range of supplier relationships and supported by a knowledgeable and loyal employee base.
“The past few weeks have been challenging for employees, customers and suppliers alike. We hope today’s announcement can put an end to this period of disruption and uncertainty.
“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.”
Matthew Clark has an incredible customer list, including JD Wetherspoon and Stonegate, said Glancey in a conference call this morning.
Through the acquisition, and with support from AB InBev, many jobs and contracts will be preserved, he added.
'We've looked before'
Glancey added: “We’ve had four days to think about it [the acquisition] and this is a business that we’ve looked at before and we didn’t do [the acquisition] for value. We’ve got capabilities and skills that are the same, but I won’t be interrupting the front end.”
Focusing on customers would be important over the coming weeks to reverse some of the damage that has been done in recent weeks following the news of Conviviality’s fall.
Conviviality as it happened:
- Conviviality warns of going bust
- Conviviality files notice to appoint administrators
- Pubs plan as Conviviality goes into administration
With the acquisition, C&C will gain access to Matthew Clark’s 18 depots and a sales team of over 250 members, serving the UK independent free-trade, as well as a range of more than 4,000 beers, wines, spirits, ciders and soft drinks, sourced from in excess of 300 suppliers.
Bibendum, meanwhile, is one of the largest suppliers of wine, beer and spirits to wholesalers to the UK on and off-trade. The brand has access to 4,000 wines, spirits and craft beers, sourced from over 400 suppliers from 20 different countries.
It is believed the two portfolios will complement one another, with C&C distributing branded beer, cider, wine, soft drinks and bottled water.