Marston’s completes £55m takeover of brewing rival

Wolverhampton pubco and brewer Marston’s has announced the completion of its £55m deal to take over the UK brewing business of the Charles Wells Group.

Based in Bedford, Charles Wells Brewing and Beer Business comprises a portfolio of more than 30 beers including leading brands such as Bombardier, Young’s and McEwan’s.

In addition, the business has UK distribution rights for the Estrella Damm lager brand and other beers under license including Kirin and Erdinger.

As part of the acquisition, Marston’s has entered into a long-term exclusive agreement to supply all beer, wine, spirits and minerals to the Charles Wells pub estate.  The brewery site, which is freehold, employs around 300 people.

The acquisition sees Charles Wells join an existing brewing portfolio including Marston’s Pedigree, Wainwright, Lancaster Bomber and Hobgoblin.  The group’s beer portfolio also includes Banks’s, Jennings, Wychwood, Ringwood, Brakspear and Mansfield beers.

Marston’s has said the acquisition complements its existing strategy by extending its position in the premium bottled ale and cask ale markets, as well as enhancing its share of the premium canned market.

It also strengthens the group’s presence in London and the South East and presents a platform to expand into Scotland.

While developing its licensed brands business, the deal also expands production capabilities to include lager brewing and canning, while improving production and distribution efficiency.

The enterprise value of £55m equates to 9x current EBITDA before synergies – which are expected to be £4m by financial year 2019.

The transaction has been funded through a new equity placing.

Marston’s offered 57.6 million new ordinary shares, with institutional investors its main target. The issue represents approximately 9.9% of the company’s issued share capital.

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