C&C Group to Acquire Gleeson Group

Stephen Glancey, CEO of C&C: “We are pleased to announce our agreement to acquire the Gleeson Group, a deal that represents a significant investment in Ireland for C&C. The acquisition has the potential to transform our existing Irish business through the addition of an extensive distribution network and the creation of an attractive, multi-­-beverage brand platform.

26 Nov 2012 --- C&C  Group,  a  leading  manufacturer, marketer  and  distributor  of  branded  cider  and  beer,  announced  that  it has  conditionally  agreed  to acquire the Gleeson Group, a leading supplier and distributor of beverages in Ireland. 
 
Transaction  Overview 
 
C&C has conditionally  agreed to acquire M J Gleeson Investments  Limited and its subsidiaries  (the “Gleeson Group” or the “Business”) (the “Acquisition”). The consideration for the Acquisition is €12.4 million payable in cash, of which €4.4 million is deferred for one year. Existing debt of €45.6 million implies an enterprise value of €58 million. 
 
The Gleeson Group is the largest distributor of packaged long alcohol drinks (LAD) to the licensed on-­-trade  in Ireland. Its leading trading platform represents a number of beer, wine and spirits brands on an agency basis. It manufactures  Tipperary mineral water, Finches soft drinks and a range of own-­-label  brands for a number of retailers. It also supplies PET bottles to drinks manufacturers. 
 
On a pro forma  basis1 the Business  generated  earnings  before  interest,  depreciation,  amortisation  and tax (“EBITDA”)  of €10.2 million for the 12 months to June 2012 implying a multiple of 5.7x 2012 EBITDA before synergy benefits. On completion,  C&C’s pro forma net debt to EBITDA ratio will be less than 1.5 times. The Acquisition is expected to be immediately earnings accretive.
 
Stephen Glancey, CEO of C&C, said: 
 
“We are pleased to announce our agreement to acquire the Gleeson Group, a deal that represents a significant investment in Ireland for C&C. The acquisition has the potential to transform our existing Irish business through the  addition  of  an  extensive  distribution  network  and  the  creation  of  an  attractive,  multi-­-beverage  brand platform.
 
Over the past 3 years, we have progressively  diversified the Group’s brand portfolio in Ireland from the single premium cider brand Bulmers to a broader LAD range including Tennent’s, Caledonia Smooth and a number of beer agency brands. The acquisition of the Gleeson Group accelerates the re-­-shaping and diversification of C&C in Ireland. The extended portfolio and direct distribution network should create a more resilient trading model that is better  suited  to dealing  with the challenges  of both current  and future  trading  environments.  It is a model that has the potential to deliver growth through investment, further brand acquisition and new agency agreements. 
 
This  transaction  provides  us  with  the  opportunity  to  significantly  strengthen  our  Irish  business  and  will  create value for our customers, suppliers and shareholders.”