BWG, the food distribution subsidiary of Irish Distillers, has made a major strategic move into the British market, the first time it has expanded outside of Ireland.
The group has made an agreed £9.5 million bid for Appleby Westward, which is the Spar distributor in southwest England. Appleby, one, of the seven privately owned Spar distributorships in the UK, supplies 260 Spar convenience stores in a region whose main population centres are Bournemouth, Bristol Exeter, Plymouth, Portsmouth and Southampton.
Appleby is a public company but over three quarters of the shares are held by directors and their families, all of whom have accepted the BWG offer of 171p sterling per share. The offer price is a premium of almost 33 per cent on the last traded price, of 129p sterling.
BWG already has a turnover of more than £400 million through its cash and carry operations and Spar franchise in the Republic and its Mace franchise in Northern Ireland. BWG made profits of £6.5 million in 1995, a 62 per cent increase on the previous year, and compensated for a slight fall in profits from Irish Distillers' core drinks business.
BWG chief executive Mr Denis Allman, said that Appleby Westward operates on substantially lower margins than BWG's Irish business. In the year to February 1996, Appleby had profits of just £173,000 sterling on sales of £81.3 million. In the half year to the end of September, there was a substantial improvement, with profits of £450,000 on sales of £45.7 million sterling.
Mr Allman said BWG would aim to increase Appleby's margins by bringing in its own expertise and also by adding the resources of a large group like Irish Distillers. "We will go over and get stuck in," said Mr Allman, although he added that the Appleby management - headed by managing director Mr Richard Youngman - will remain in place.
Mr Allman said, however, that BWG intends to expand the Appleby business from its existing base in the south west of England. He said that all seven Spar franchises in England are owned by family companies. None of these, with the exception of Appleby, has indicated that they want to sell out. "If anybody does want to sell, then web will be happy to talk to them," said Mr Allman.
