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Conviviality PLC

About Conviviality Plc

History

Conviviality Plc (“Conviviality”, the “Company” or the “Group”) was founded in 1981 as Bargain Booze Ltd with the opening of the first store in Sandbach, Cheshire. The subsequent launch of the franchise model facilitated rapid growth in its North West heartland.

In 2006, ECI, the private equity group, backed a leveraged management buy-out and supported the Group’s expansion into the convenience market with the launch of Bargain Booze Select Convenience in 2007.

Bargain Booze Ltd was renamed Conviviality Retail and subsequently floated on the Alternative Investment Market (“AIM”) of the London Stock Exchange in July 2013, which incorporated a full exit for ECI.

In September 2013, the Company acquired 22 Wine Rack stores, predominantly in the Greater London area, from L.C.L Enterprises Limited (now Wine Rack Limited). The acquisition of the Wine Rack stores supported the Company’s aim of further expanding into the South of England, while bringing a new brand to the high street and strengthening the Company’s position in specialist wines and spirits, therefore meeting the needs of a more affluent customer base.

In the financial year to 26 April 2015, the Company grew its market presence in the East Midlands and Yorkshire, a stated area for growth, by acquiring 31 Stores from R N B Stores Limited, and the entire share capital of GT News (Holdings) Limited, adding a further 37 stores to the existing portfolio.

In line with Conviviality’s strategy of leveraging its alcohol wholesaling capabilities into new markets, the Company completed the reverse takeover of Matthew Clark (Holdings) Limited (“Matthew Clark”) for an enterprise value of £200m in October 2015. Matthew Clark is the UK ’s leading independent wholesaler and distributor of alcoholic beverages to the on trade market. The acquisition was financed through a Placing that raised £130.0m of gross proceeds and £80.0m that was drawn under new debt facilities.

Today the Group operates two divisions: Conviviality Retail, which operates the off-licence and convenience franchised and Company owned stores: and Matthew Clark, which supplies 17,000 hotels, bars, restaurants and venues.

Conviviality Retail owns the UK’s largest franchised off-licence and convenience chain, offering excellent wholesale terms, exceptional breadth of range, quality and value to its Franchisees and their customers. Conviviality Retail operates 624 stores (as at 26 April 2015) predominantly trading under the Bargain Booze, Bargain Booze Select Convenience and Wine Rack brands.

In the 52 weeks ended 26 April 2015 Conviviality Retail reported revenues of £364.1m and profit before tax and exceptional items of £9.7m.

Matthew Clark is the UK’s largest independent alcohol wholesaler and distributor to the on-trade drinks sector, generating more annual revenue than the aggregate of its seven largest independent drinks wholesaling competitors, and delivers to approximately 17,000 on-trade premises each year. Matthew Clark delivered over 48 million bottles of wine, 22 million bottles of spirits, 171 million pints of beer and 16 million bottles of cider in the year to February 2015.

For the year ended 28 February 2015, Matthew Clark generated revenues of £811.2m and adjusted EBITDA of £25.3m.

Conviviality ’s strategy is to create a model connecting the on and off-trade which enables the Company to optimise revenue and profit from brands and exclusive labels by maximising their distribution potential across all drinking occasions (retail outlets, restaurants, bars, night clubs, pubs and events). The Company leverages significant expertise in sourcing, marketing and distribution to ensure it meets the needs of its customers who want to consume alcoholic beverages in or out of home, whatever the occasion.

Conviviality will be able to maximise distribution of its products across all its channels by building greater strength in drinks distribution and wholesaling and therefore become the drinks sector ’s leading wholesaler and distributor across the off-licence and convenience portfolio.

This strategy was communicated to suppliers at the Conviviality Supplier conference in November 2015 which brought together suppliers of Conviviality Retail and Matthew Clark. The buying teams of Conviviality Retail and Matthew Clark are now working collaboratively with suppliers and brand owners to capitalise on this opportunity.

Through the acquisition of Matthew Clark, Conviviality expects to generate buying, distribution and revenue synergies.