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Fri 10th Apr 2015 - Majestic acquires Naked Wines in “transformational deal”
Majestic acquires Naked Wines in “transformational deal”: Majestic Wine is to acquire Naked Wines, a customer-funded international online wine business to create an international, multi-channel specialist win retailing group. The company stated: ”The transaction creates a significant strategic opportunity for both businesses by sharing complementary strengths: Naked Wines’ online and e-commerce skills and Majestic’s national store network. The transaction also opens up attractive international growth in the USA and Australia. Majestic and Naked Wines will continue to operate as independent brands.” The deal will cost up to £70m, which includes circa £50m payable on completion in cash, plus up to £20m contingent consideration payable in Majestic’s ordinary shares. For the year ended 31 December 2014, Naked Wines sales were £74m, up 40% year on year, with an Ebitda loss of £3.3 million. It currently has over 300,000 customers funding over 130 winemakers, underpinned by large and growing wine markets. The Naked Wines senior team will remain with the business and will receive over 70% of their potential consideration in Majestic’s ordinary shares, which will all be subject to performance criteria. Rowan Gormley, founder and chief executive of Naked Wines has been appointed as chief executive of the enlarged Majestic. Majestic expects to announce adjusted pre-tax profit of approximately £21 million for the year ended 31 March 2015. Phil Wrigley, Majestic’s chairman, said: “The acquisition of Naked Wines represents a transformational deal. The two businesses have significant strengths which are very complementary. Majestic’s distribution skills, a nationwide UK store network and customer service orientated knowledgeable staff, are a perfect fit with Naked Wines’ unique sourcing and selling model. This acquisition will significantly accelerate the planned development of Majestic’s online capabilities whilst providing Naked Wines with a nationwide store network to allow a Click & Collect delivery option for its customers. In addition, this acquisition opens up attractive international markets, increasing our potential customer reach eightfold. I am delighted that Rowan has agreed to be the new CEO for the enlarged Majestic. He has a fantastic track record as a successful businessman, innovator and entrepreneur in the wine industry and beyond. He has also assembled a deep pool of talent at Naked Wines with a similar culture to Majestic.” Rowan Gormley added: “The combination of Naked Wines and Majestic provides the very exciting opportunity to build a world class wine retailer, serving customers who are looking for inspiration that the supermarkets cannot provide. This is great news for the customers, staff and suppliers of both businesses and will ultimately create significant shareholder value.”

Brake Brothers distribution centre sold for £37.2m: Tritax Big Box Reit has exchanged contracts to buy Brake Brothers regional distribution centre at Flex Meadow, Harlow, for £37.2 million (net of acquisition costs), which reflects a net initial yield of 5%. The purchase has been funded out of equity proceeds, with senior debt finance expected to be introduced in the near term. Completion is expected to take place in June 2015.The asset is strategically positioned in a core south east location, close to the M11, the M25 and Central London, providing distribution reach across the south east. It is currently undergoing a comprehensive refurbishment programme (fully financed by the tenant) and comprises a rentalised area of approximately 268,000 sq ft, a low site cover of 37%, and features cross dock loading and a temperature controlled environment. It is being acquired from LondonMetric Property with an unexpired lease term of approximately 24.5 years, subject to five yearly upward only rent reviews indexed to RPI, and capped at 5% pa compound. Colin Godfrey, Partner of Tritax, said: “We are pleased to be doing business with LondonMetric in the acquisition of this regional logistics warehouse at Harlow. The location, being in close proximity to the M25, is well positioned for distribution to the Greater London market and enhances our portfolio in the south east. The investment provides good quality long term income which will potentially benefit from attractive rent reviews. Brake Bros also provides further tenant diversification for the Company’s portfolio.”

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