Majestic deal for wine firm
One of the country’s best known suppliers of fine wines, Suffolk-based Lay & Wheeler, is to hit the mass consumer market following its acquisition by Majestic Wine for £4.75m.
Majestic is the UK’s largest wine warehouse chain with 147 stores and says the acquisition will allow it to offer customers a complete fine wine service from the vineyard through to storage, cellar management and home delivery as well as sale within the wider fine wine market. Lay & Wheeler is a family owned company with a deep expertise in the specialist fields of international fine wine sourcing, en primeur sales, portfolio management, cellarage and broking that stretches back over 150 years. The company offers the storage of customers’ wines under bond, wines which are kept in optimum storage conditions with duty and VAT being deferred until the wines are removed from bond. As the fine wine industry deals predominantly in wines under bond, this gives Lay & Wheeler and its customers access to the wider market and strengthens customer relationships. Over recent years Majestic has successfully introduced fine wine display areas into over a third of its stores and has achieved strong growth in sales of wines, at £20 and above, that are ready to drink. The acquisition of Lay & Wheeler allows Majestic to offer its customers a complete fine wine service from the vineyard through to storage, cellar management and then secure delivery to their home, or sale within the wider fine wine market. Steve Lewis, CEO of Majestic Wine said: “Given the clear and continuing appetite of our customers for fine wine, Lay & Wheeler is an extremely good fit with Majestic. This acquisition will allow us to greatly extend this important offering and help continue the Majestic growth story.” The acquisition is subject to either an upward or downward revision, depending on whether the net assets of the businesses exceed or are below £1.2m with the maximum consideration at £6.0m inclusive of net debt. Lay & Wheeler made an aggregate profit before tax of £0.5m in the year to March 2008 and the deal is expected to be earnings enhancing for Majestic in its first full year. The acquisition is being funded by a new term loan arranged with Barclays Bank. The loan facility is committed for three years.