Alcohol group Conviviality is to buy wine distributor and wholesaler Bibendum in a deal that worth £60m, which will be part-funded through a share issue.
The Aim-listed business is looking to raise £32m through issuing shares at 205p each, with a further £10m being drawn from its banking facilities.
Bibendum, which supplies wine, beer and spirits to around 4,000 restaurants, pubs and hotels across the UK, is expected to boost Conviviality’s annual turnover by 23 per cent, with combined annual sales of more than £1.4bn. The acquisition is expected to be earnings enhancing in the current financial year.
Conviviality, which recently bought Matthew Clarke, said the deal would "enable [the] acceleration of the group's strategy to satisfy all of its customers who want 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".
Shareholders will be asked to approve the deal at a meeting on 19 May, but has already received backing from investors with 35.2 per cent. of the issued share capital
Diana Hunter, chief executive, said: "We are pleased to be acquiring Bibendum as the business will not only accelerate our strategy of expanding our wholesaling expertise into new markets and channels, but brings significant expertise to Conviviality in the off-trade wholesale market through the PLB business.
"Bibendum PLB's wine speciality, particularly in old world and premium wines complements our other businesses and helps us to accelerate our leading position in the independent on-trade market. The team brings significant wine wholesaling expertise and an enviable portfolio of high quality and loyal customers, particularly in London and the South East.
"By operating a delivered wholesale model we can serve a diverse range of customers and build our wine and spirit volumes further while simultaneously strengthening our retail channel. The acquisition of Bibendum PLB accelerates our aim to satisfy all of our customers who want 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.
"We believe the acquisition will give rise to significant potential synergies and increase returns for Conviviality's shareholders."