Monday, 27 May, 2019

Conviviality finds buyer for direct business

FRANCE-AGRICULTURE-VITICULTURE-WINE-CHAMPAGNE C&C is circling parts of the stricken business
Ginger Lawrence | 05 April, 2018, 01:54

The deal is set to be confirmed later today on the appointment of administrators to the Conviviality Brands business.

Magners Cider owner C&C Group and AB Inbev are in "advanced discussions" with beleaguered Conviviality to acquire distribution arms Matthew Clark and Bibendum.

"C&C is pleased to be able to lead this industry-wide solution and bring stability to the business after the recent period of uncertainty", says a statement from C&C Group. It said at the time that it had also received sale interest from several suitors.

C&C shares were up 12% on Wednesday afternoon at EUR2.87 each, while Conviviality's are suspended.

Consideration for the shares would be a nominal sum, and C&C will provide sufficient funds to support the on-going working capital and other cash requirements of the business.

The Bargain Booze-to-Wine Rack operator, whose CEO Diana Hunter has fallen on her sword, also stated shareholders would receive "little-to-nil value" in the wake of its disastrous implosion. Conviviality's board said it expected adjusted EBITDA for the entire Conviviality group for the year ending April 29th 2018 to be in the range of £45.5 million to £46 million. Wine made up 37% of Bibendum and Matthew Clark combined sales.

As well as its own branded products, C&C has a substantial third party drinks wholesaling, own-label and agency distribution business focused on Ireland and Scotland.

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The deal is being supported by C&C partner AB InBev, which is the world's largest brewer.

AB InBev already works with C&C in the United Kingdom, and Conviviality was also a key launch partner for AB InBev's Bud Light beer brand in the United Kingdom from March 2017 onwards.

"The last few weeks have been challenging for employees, customers and suppliers alike".

A further announcement is expected later today.

"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 United Kingdom hospitality sector".

C&C said the deal would, alongside its existing drinks wholesaling business, create the leading independent route-to-market network across the British Isles, providing direct access to an incremental 23,000 customers across the United Kingdom, and enhance access for C&C's cider and super-premium brands across the on and off-trade in the UK.