# Conviviality Plc To acquire Central Convenience retail business

- Link: https://www.directorstalkinterviews.com/conviviality-plc-acquire-central-convenience-retail-business/412742231
- Published: 2017-12-15T07:42:42+00:00
- Author: Giles Arbor

**Conviviality Plc** (LON:CVR), the UK’s leading independent alcohol wholesaler 
and distributor of alcohol and impulse products, serving consumers through its franchised
retail outlets and through hospitality and food service, is pleased to announce 
that its wholly-owned subsidiary, Bargain Booze Limited (“BBL”) has offered to acquire
the business and assets of 109* convenience stores and the rights as franchisor 
of a further 18 franchisee-operated stores trading under the fascia ‘Central Convenience’(“
Central Convenience”) from WS Retail Ltd (“WSR”), for a cash consideration of £25.0
million (the “Acquisition”). WSR is a wholly-owned subsidiary of Palmer & Harvey
McLane Limited (in administration) (“P&H”) which entered administration on 28 November
2017.

If the offer is accepted, the Company will fund the Acquisition through the completed
placing of 8,000,000 new ordinary shares of £0.0002 each in the capital of the Company(
the “Placing Shares”), at a price of 375 pence per Placing Share (the “Placing Price”)
to raise gross proceeds of £30.0 million (the “Placing”). The Placing is conditional
inter alia on the Acquisition being completed by 4.30 p.m. today and has been fully
underwritten by Investec Bank plc (“Investec”), the Company’s sole bookrunner, broker
and nominated adviser.

The Company will issue a further announcement today to update on the satisfaction(
or otherwise) of this condition.

**Acquisition Highlights**

· Central Convenience provides enhanced scale and reach for the Conviviality Retail
division:

o Strengthening the Group’s retail presence, particularly in the south and south
west of England;

o Adding, in aggregate, 127 convenience stores including 20 petrol forecourts, stores
incorporating 47 Post Offices and 18 franchisee operated stores; and

o Securing wholesale supply to owned and franchised stores, allowing the Group to
realise further economies of scale;

· The Acquisition is expected to facilitate acceleration of the Group’s strategy
to satisfy customers who wish to consume alcoholic beverages at home or out of home,
whatever the occasion, serving customers directly via retail outlets and indirectly
through hospitality and foodservice channels.

· Together, the Acquisition and the Placing are expected to be earnings enhancing
in the Group’s first full financial year of ownership of Central Convenience.

· For the 53 weeks ended 8 April 2017, WSR generated unaudited turnover of c. £75.7
million** and unaudited EBITDA of c. £3.5 million**.

· The directors of the Company (the “Directors”) believe that potential exists for
operational, buying and distribution synergies to be realised from the proposed 
combination of Central Convenience and Conviviality Retail.

· The Acquisition will be completed on and by 4.30 p.m. today if the offer is accepted.

**Placing Highlights**

· The Placing, which has been fully underwritten by Investec, comprises the issue
of 8,000,000 Placing Shares at a price of 375 pence per Placing Share.

· The Placing is conditional, inter alia, WSR accepting BBL’s offer and the Acquisition
being completed by no later than 4.30pm today (or such later time as Investec and
the Company may agree) and Admission occurring on or before 19 December 2017.

· The net proceeds of the Placing will be used to, inter alia, fund the Acquisition.

· The Placing Price represents a 0.79 per cent. discount to the closing middle market
price of 378 pence per ordinary share of £0.0002 each in the capital of the Company(“
Ordinary Share”) on 14 December 2017, being the last practicable date prior to the
date of this Announcement.

· The Placing Shares are to be allotted under the authorities granted to the Directors
at the Company’s AGM on 7 September 2017, utilising the authority granted in connection
with acquisitions.

· Application has been made to the London Stock Exchange for the Placing Shares 
to be admitted to trading on AIM (“Admission”) and Admission is expected to take
place on 19 December 2017.

* subject to leases being assigned to BBL post completion of the Acquisition

**as per management accounts

> **Diana Hunter, Chief Executive Officer of Conviviality Plc, said:** “We are pleased
> to have finalised terms for a potential acquisition of Central Convenience as 
> it provides a clear opportunity to accelerate the growth and reach of the existing
> Conviviality Retail business, notably broadening our geographic footprint in the
> south and south west of England. The acquisition, if effected, will support our
> strategic goal to be the drinks and impulse sector’s leading independent distributor
> and we believe that potential exists for a range of synergies and increased returns
> for Conviviality’s shareholders. We look forward to welcoming colleagues from 
> Central Convenience to the Conviviality Group.”

Share on: