DCC to uncork growth in UK wine market

ISEQ-listed DCC plc's food and beverage division has agreed to acquire Bottle Green Limited, a UK-based wine sales and marketing business with a five per cent share of UK off-trade wine market volume.

The off-trade market accounts for approximately 80% of the total market in the UK. The decision is subject to clearance of the Irish Competition Authority.

Bottle Green was established in 1990 by Jerry Lockspeiser, who will continue as managing director of the business.

The company supplies wines from France, Hungary, Australia, Chile, California, Spain, South Africa and Argentina.

Bottle Green is currently generating operating profits of approximately £2m (€3m) per annum, and the company is expected to have net cash in bank of approximately £4.7m (€7m) at completion.

The initial consideration for the business, inclusive of its cash balance, will be £13.1m (€19.5m) resulting in a cost of £8.4m (€12.5m) net of cash balances.

Further consideration up to a maximum of £11.9m (€17.8m) may be paid based on the average results of Bottle Green for the three years to March 31, 2007, which would result in a total maximum potential consideration of £25m (€37.3m).

In order to earn the maximum consideration the average profits in the period to March 2007 would have to be over £5.355m (€8m) per annum.

Jim Flavin, Chief Executive/Deputy Chairman of DCC plc, said today: "The acquisition of Bottle Green provides an excellent opportunity for DCC Food and Beverage to build on the market outperformance of its Irish wine business by expanding into a more substantial and growing UK wine market.

“Bottle Green is well positioned in the off-trade segment of this market, benefiting from the company's strong reputation, deep knowledge of the wine market and the success of its own brands."

DCC's shares will open at €14.48 this morning.