CCR: C&C Group PLC: Acquisition

  CCR: C&C Group PLC: Acquisition

UK Regulatory Announcement

DUBLIN & LONDON

                    C&C Group plc to acquire Gleeson Group

            Transaction transforms C&C’s business model in Ireland

C&C Group plc (‘C&C’ or the 'Group’), a leading manufacturer, marketer and
distributor of branded cider and beer, today announces that it has
conditionally agreed to acquire the Gleeson Group, a leading supplier and
distributor of beverages in Ireland.

Transaction Overview

C&C has conditionally agreed to acquire M J Gleeson Investments Limited and
its subsidiaries (the “Gleeson Group” or the “Business”) (the “Acquisition”).
The consideration for the Acquisition is €12.4 million payable in cash, of
which €4.4 million is deferred for one year. Existing debt of €45.6 million
implies an enterprise value of €58 million.

The Gleeson Group is the largest distributor of packaged long alcohol drinks
(LAD) to the licensed on-trade in Ireland. Its leading trading platform
represents a number of beer, wine and spirits brands on an agency basis. It
manufactures Tipperary mineral water, Finches soft drinks and a range of
own-label brands for a number of retailers. It also supplies PET bottles to
drinks manufacturers.

On a pro forma basis^1 the Business generated earnings before interest,
depreciation, amortisation and tax (“EBITDA”) of €10.2 million for the 12
months to June 2012 implying a multiple of 5.7x 2012 EBITDA before synergy
benefits. On completion, C&C’s pro forma net debt to EBITDA ratio will be less
than 1.5 times. The Acquisition is expected to be immediately earnings
accretive.

Stephen Glancey, CEO of C&C, said:

“We are pleased to announce our agreement to acquire the Gleeson Group, a deal
that represents a significant investment in Ireland for C&C. The acquisition
has the potential to transform our existing Irish business through the
addition of an extensive distribution network and the creation of an
attractive, multi-beverage brand platform.

Over the past 3 years, we have progressively diversified the Group’s brand
portfolio in Ireland from the single premium cider brand Bulmers to a broader
LAD range including Tennent’s, Caledonia Smooth and a number of beer agency
brands. The acquisition of the Gleeson Group accelerates the re-shaping and
diversification of C&C in Ireland. The extended portfolio and direct
distribution network should create a more resilient trading model that is
better suited to dealing with the challenges of both current and future
trading environments. It is a model that has the potential to deliver growth
through investment, further brand acquisition and new agency agreements.

This transaction provides us with the opportunity to significantly strengthen
our Irish business and will create value for our customers, suppliers and
shareholders.”

Conference Call Details | Analysts & Institutional Investors

C&C will host a conference call for analysts and institutional investors
today, 22 November 2012, at 11.00amGMT (6.00am ET).Dial in details to access
this conference call are outlined below:

Ireland                +353 1 436 4265
UK & Rest of Europe       +44 20 8817 9301
USA                       +1 718 354 1226
                          

Transaction Highlights & Rationale

  *The Acquisition demonstrates C&C’s continuing commitment to the Irish
    drinks market generally and to the on-trade specifically
  *The Acquisition transforms C&C’s business model in Ireland, enhances its
    trading strategy, diversifies its revenues and improves its growth
    prospects
  *The Acquisition combines a leading LAD brand owner with a direct
    distribution network to create a compelling multi-beverage platform with
    scope to accommodate additional agency distribution arrangements
  *The Acquisition provides C&C with a well-managed logistics network, a
    skilled workforce and distinct trading expertise
  *The Business’s alcohol, water and soft drinks portfolio are complementary
    with C&C’s existing brand portfolio in Ireland, providing a wide product
    portfolio offering for customers
  *The Acquisition provides export growth potential for the Gleeson Group
    brands through C&C’s established routes to international markets
  *The Acquisition is immediately earnings accretive and value creating; the
    return on invested capital is expected to exceed the weighted average cost
    of capital within 2 years. The enterprise value of the Acquisition implies
    a multiple of 5.7x pro forma 2012 EBITDA.

Transaction Overview

C&C has conditionally agreed to acquire Gleeson Group, the largest distributor
of packaged LAD to the licensed on-trade in Ireland. Gleeson also manufactures
Tipperary mineral water, Finches soft drinks, a range of own-label brands for
a number of retailers and supplies PET bottles to drinks manufacturers. The
Acquisition does not include the Merry’s cream liqueur or the cider businesses
of the Gleeson Group, which are being retained by the vendor.

The Business has its principal production facilities at Borrisoleigh, Co.
Tipperary and 11 distribution depots across the island of Ireland. On a pro
forma basis the Business generated EBITDA of €10.2 million for the 12months
to June 2012 and profits before tax of €2.9 million for the same period. As at
30 June 2012, the Business had pro forma gross assets of €141.8 million, net
debt of €45.6 million and pro forma net assets of €54.5 million.

The consideration for the Acquisition is €12.4 million payable in cash, of
which €4.4 million is deferred for one year. Existing debt of €45.6 million
implies an enterprise value of €58 million. The consideration will be funded
from C&C's existing financial resources. On completion, and assuming that the
recently announced acquisition of the Vermont Hard Cider Company is completed,
C&C will have a net debt to EBITDA ratio of less than 1.5times. The
Acquisition will have no impact on the Group’s progressive dividend policy.

The Business is being acquired from a holding company owned by Mr Pat Cooney
and members of his family.

The Acquisition is conditional upon clearance by the Irish Competition
Authority. It is expected that the Acquisition will be completed before the
end of the Group’s financial year.

About C&C Group plc

C&C Group plc is a manufacturer, marketer and distributor of branded cider and
beer. The Group manufactures Bulmers, the leading Irish cider brand, Magners,
the premium international cider brand, the Gaymer Cider Company range of
branded and private label ciders and the Tennent's beer brand. C&C Group also
owns Hornsby’s, a leading craft cider brand in the United States. The Group
also distributes a number of beer brands in the Scottish, Irish and Northern
Irish markets, primarily for Anheuser-Busch InBev.

Note regarding forward-looking statements

This announcement includes forward-looking statements, including statements
concerning current expectations about future financial performance and
economic and market conditions which C&C believe are reasonable. However,
these statements are neither promises nor guarantees, but are subject to risks
and uncertainties that could cause actual results to differ materially from
those anticipated.

C&C Group plc | Contacts

C&C Group:               Alan Daly
                            Head of IR
                            Tel: +353 1 654 6239
                            Email: alan.daly@candcgroup.ie

Investors & Analysts:       Mark Kenny/Jonathan Neilan
                            FTI Consulting
                            Tel: +353 1 663 3686
                            Email: CandCGroup.SC@fticonsulting.com

Media Dublin:               Paddy Hughes
                            Drury
                            Tel: +353 1 260 5000
                            Email: paddy.hughes@drury.ie

Media London:               Robert Ballantyne/Shanshan Willenbrock
                            Cardew Group
                            Tel: +44 20 7930 0777
                            Email: robert.ballantyne@cardewgroup.com
                            

^1 based on the Gleeson Group’s 2012 audited accounts excluding the Merry’s
and cider businesses

Contact:

C&C Group PLC
 
Press spacebar to pause and continue. Press esc to stop.