Punch Taverns are selling their 50% stake in drinks wholesaler Matthew Clark to Conviviality Retail for £100.7m.
Conviviality Retail Plc owns the UK’s largest franchised off-licence and convenience chain with 575 franchisee-operated stores. The stores are located throughout England and Wales and operate under six fascias including Bargain Booze, Bargain Booze Select Convenience, Wine Rack and Thorougoods. Conviviality Retail purchased Wine Rack in August 2013. Wine Rack is a specialist retailer of wine, spirits, tobacco and related products with 22 stores, predominantly in the Greater London area.
Conviviality plans to triple its annual sales. The firm has confirmed previous reports and announced plans to acquire drinks wholesaler Matthew Clark, which is a 50/50 joint venture between Punch Taverns and Hertford Cellars Limited.
Conviviality will pay £200m for Matthew Clark, which will be funded with a £130m placing of new shares and a new borrowing facility of £80m. The deal should transform Conviviality into a major UK drinks wholesaler and the group expects to have combined annual sales of more than £1.1bn, nearly triple last year’s turnover of £364.1m.
Punch will also benefit, as it will receive around £100m for its stake in Matthew Clark. This will help to reduce its hefty £1.5bn debt burden.