DCC buys into British market

DCC yesterday made Leeds-based wine seller Jerry Lockspeiser a multi-millionaire when it bought out his 14-year-old company for a net €12.5 million.

This is DCC's food and beverage divisions's first foray into the British market and marks a significant strategic move by the multifaceted group.

DCC has reached agreement to acquire Bottle Green Limited, a wine sales and marketing business with a 5% share of British off-trade wine market volume. The off-trade market accounts for approximately 80% of the total off and on trade market in Britain. The deal is subject to approval by the Competition Authority in Ireland.

However, the final consideration will be between €12.5m €37.3m depending on the average results between now and 2007. The maximum consideration will only be paid if Bottle Green achieves average profits of €8m a year over the next three years. Bottle Green's current operating profit is around €3m per annum.

Bottle Green is expected to have net cash in bank of approximately €7.0m at completion of the sale.

Goodbody Stockbroker analyst Ian Hunter said in a note to clients: "If this deal is a precedent for others to follow, it would appear that the company will be capable of doing further low multiple acquisitions in a business where there is still growth potential (ie wine consumption within the overall alcohol market)."

DCC chief executive Jim Flavin said the acquisition of Bottle Green provides an excellent opportunity for DCC Food & Beverage to build on the market out-performance of its Irish wine business by expanding into a more substantial and growing British wine market.