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Conviviality Retail acquires Matthew Clark
Matthew Clark, the UK’s largest independent drinks distributor, is to be sold to Conviviality Retail in a deal worth £200 million.
A 50/50 joint venture between Accolade Wines and Punch Taverns, Matthew Clark currently distributes over 4,000 drink products, including 1,000 spirits, to its on-trade customer base. Both parties announced this morning they are to sell their shares for £100 million each.
Conviviality Retail’s acquisition will create a wholesaler with total annual sales of more than £1.1bn.
In a statement, Conviviality said that its enlarged business would be independent of major drinks brands, enabling it to “supply an unrestricted selection of products to customers who value breadth of range”.
The acquisition is expected to be “earnings enhancing” from year one.
Both Accolade and Punch have secured 10-year supply contracts with Matthew Clark at agreed pricing levels as part of the deal.
Diana Hunter, chief executive officer of Conviviality, 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.”
Duncan Garrood, chief executive officer of Punch Taverns plc, said: “We are pleased to have agreed the disposal of our investment in Matthew Clark and at a significant premium to our current book value.
“The sale of a non-core business will enhance our financial flexibility to pursue our strategic objectives for our core activities.”
The agreement has yet to be approved by shareholders and is expected to be finalised in October.