Marston’s has announced that it has signed a deal to acquire the Charles Wells brewing business from the Charles Wells Group for £55m.
Charles Wells Brewing and Beer Business has a portfolio of more than 30 beers including leading brands such as Bombardier, Young’s and McEwan’s. It also has UK distribution rights for the Estrella Damm lager brand and other beers under licence including Kirin and Erdinger.
The acquisition gives Marston’s the exclusive agreement to supply all beer, wine, spirits and minerals to the Charles Wells pub estate.
Marston’s hopes that the acquisition will strengthen its presence in London and the South East, and present a platform to expand into Scotland. The acquisition is expected to see Marston’s ale market share increase from 11% to 16%.
For the financial year ended 30 September 2016, Charles Wells Brewing and Beer Business generated revenues of £92m, EBITDA of £6m, operating EBIT of £5m on a 52 week basis and net tangible assets of £36m. Marston’s estimates it can make cost savings of £4m by 2019.
Ralph Findlay, chief executive officer of Marston’s, said: “The acquisition of Charles Wells Brewing and Beer Business builds on Marston’s established brewing prowess and is a further step in our objective to develop the leading premium beer business in the UK market. We have demonstrated our ability to acquire, integrate and develop beer brands evidenced by the success of brands such as Hobgoblin, Wainwright, and Lancaster Bomber. We have also achieved success with international licensed brands including Shipyard, now the second biggest craft beer in the UK on trade.”
Justin Phillimore, chief executive officer of Charles Wells Brewery Limited, added: “We are delighted to have reached an agreement with Marston’s to acquire our brewery and become a close trading partner. After a detailed review of our strategy we had decided to re-balance the company more towards retail investment and that meant finding a partner we could work with for the future. There are opportunities for both companies in this deal and we look forward to bringing them to life.”
Over the past five years, Marston’s Beer Company has deployed a strategy to become the UK’s leading premium beer business. For the year end 1 April 2017, the company reported a 3% rise in revenue at £440.8m, profit before tax increase of 3% to £33.7m and underlying operating profit was up 0.7% to£71.0m (2016: £70.5m).
It also reported a 1.6% rise in like-for-like sales at destination and premium outlets, a 1.7% increase at taverns, and a 2% rise for own brand beer.
Marston’s is on track to open 23 pubs and bars and eight lodges this year. Since the half-year end, Marston’s has entered into a five-year agreement to become the exclusive distributor to Punch pubs, comprising a portfolio of around 1,355 leased and tenanted pubs nationwide, from September 2017.
Today the company also announced that it will acquire seven pubs to enhance its destination and premium estate for £13m. This month, it also acquired three Pointing Dog Premium pubs for £8m.
It currently operates 377 destination and premium pubs, 823 taverns and 365 leased pubs.
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