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.”

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