MBWS offloads Polish operationsBy Nicola Carruthers
Marie Brizard Wine & Spirits (MBWS) has agreed to sell its Polish business, including the Polmos Łańcut distillery, to United Beverages Group after facing “significant challenges” in the market.
The agreement includes the 100% sale of shares in MBWS Polska, the firm’s Polish arm, and part of the Polmos Łańcut distillery’s outstanding shares. The two companies will work closely as partners, and United Beverages Group will continue to produce Polish vodka Sobieski, which will remain under the ownership of MBWS.
William Carey, CEO of the United Beverages Group, said: “The acquisition of a leading Polish vodka producer as well as of a modern distillation plant completes one of the strategic gaps for the United Beverages Group.
“These production assets, coupled with our existing distribution strength, are an attractive investment opportunity to create a vertically integrated and value-increasing platform. This transaction will enable us to further develop our vision of establishing a leading, integrated and Polish-based FMCG group, with a specific focus on the alcoholic beverages segment.”
Following the completion of the deal, United Beverages Group said it will have annual revenues of more than €1 billion (US$1.14bn) and employ 2,500 workers in Poland.
Carey continued: “I look forward to working with the team at MBWS Polska and at Polmos Łańcut on the integration and with a view to grow the business. I am also convinced of the strong potential of both businesses, especially as part of the broader United Beverages Group. Finally, I want to thank Andrew [Highcock, MBWS CEO] and the MBWS board for selecting the United Beverages Group as partner and I strongly believe in the mutual value creation of our ongoing cooperation.”
Challenging Polish market
MBWS noted that the Polish business generated a loss of €9.3 million (US$10.6m) in earnings before interest, taxes, depreciation, and amortisation (EBITDA) in 2019. As such, it had “substantially hampered” the firm’s return to profitability in recent years.
The deal is said to be in line with MBWS’s 2019-2022 strategic plan, which seeks to assess each part of its business and create and sustain shareholder value in the mid- to long-term.
The divestment follows several years of “significant challenges” in the market, MBWS said, despite the recent improvement in productivity and a “selective commercial strategy”. The Polish business lacked the “required scale and footprint to meet the stated mid- to long-term objectives of sustained profitability”, the group added.
Andrew Highcock, CEO of MBWS, said: “I am pleased that we have been able to reach an agreement with the United Beverages Group, one of the largest and most established players in the Polish alcoholic beverages market, with over 25 years of experience.
“I am convinced that we found a great home for the Polish assets, which will secure their long-term future. Above all, this choice allows the continuity for the employees of our subsidiary, whom I would like to thank for their commitment and who will benefit from a new momentum within United Beverages.
“For MBWS, this agreement is also another step forward in our group strategy of simplifying the operating model and of focusing on investments in shareholder value optimising assets.”
MBWS noted that the immediate cash impact from the sale will remain “very limited” due to the net financial debt related to the Polish business.
In addition, a new distribution agreement has been secured, which will see a substantial number of MBWS’s brands imported by United Beverages Group.
Financial details of the deal have not been disclosed. It is expected to be completed within two to four months, subject to a decision from Poland’s competition authority and the refunding of some financial debts related to the Polish operations.