C&C shares jump 8.75% after purchase of Matthew Clark Bibendum

Drinks group C&C has acquired Matthew Clark, the leading independent distributor to the UK pub trade, and wine business Bibendum.

The Irish company will pay a nominal sum for the companies but will provide them with working capital. Budweiser brewer AB InBev, which has a strong relationship with Matthew Clark, will provide additional cash to support the deal, C&C said.

The acquisition includes brand representation business Catalyst and outdoor events firm Peppermint.

Matthew Clark and Bibendum are both owned by Conviviality, which announced plans to call in administrators last month.

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Stockbroker Davy said the acquisition was “transformational” for C&C’s UK platform.

“Following the acquisitions of Wallaces and Gleeson and investment in Admiral, MCB [Matthew Clark Bibendum] marks a material upscaling of C&C’s downstream activities across core markets,” the broker said.

“While not without risk (maintaining supplier and customer relationships will be key), we believe the transaction makes economic and strategic sense and will help reshape the equity narrative.”

Separate business

If the deal is approved, Matthew Clark Bibendum will be run as a separate business, C&C said, and at completion the company will have £102 million of working capital facilities provided by its current lender group, which will be repayable over the following 12 months.

Shares in C&C jumped 8.75 per cent to close at €2.876 after the confirmation of the deal.

Matthew Clark is the largest independent distributor to the UK on-trade drinks sector, with more than 4,000 products –including beers, wines, spirits, cider and soft drinks – from over 300 suppliers going to 20,000 pubs.

C&C said the deal would, alongside its existing drinks wholesaling business, create the leading independent route-to-market network across the British Isles, providing direct access to an incremental 23,000 customers across the UK, and enhance access for C&C’s cider and super-premium brands across the on- and off-trade in the UK.

‘Great businesses’

"We know the Matthew Clark and Bibendum businesses very well," said C&C chief executive Stephen Glancey. "They are great businesses with unparalleled on-trade market access, a wide range of supplier relationships and supported by a knowledgeable and loyal employee base."

He said the two businesses would operate under one combined brand, Matthew Clark Bibendum.

“The last few weeks have been challenging for employees, customers and suppliers alike. We hope today’s announcement can put an end to this period of disruption and uncertainty. We look forward to working with our new colleagues and other stakeholders to bring stability and restore the group’s position as one of the leading and most respected drinks suppliers to the UK hospitality sector.”