DCC, the industrial holding group, has acquired the wholesale division of Mitchell & Son (Mitchells) of Dublin, one of Ireland's oldest wine merchants, for an estimated £550,000. It has also acquired a 45 per cent interest in Merits Health Products, a Taiwan based manufacturer of rehabilitation products, for $4.18 million (£2.53 million).
Mitchells, controlled by the Mitchell family, will retain the retail/restaurant business and premises situated in Kildare Street, Dublin,
"We believe that there are good opportunities for expansion of the retail business and we are now in a position to take advantage of these opportunities," said managing director, Mr Jonathan Mitchell. "Plans are well advanced for 1997", and these, he said, could include an expansion of the Kildare Street business and the opening of one or two specialist wine outlets outside Dublin. "We are almost back to our original route" of selling to the private and corporate sectors," he said. Asked about competition from the supermarkets, he said they have created a greater awareness of wine and that has helped the business.
Mitchells started business in 1805 as a cafe and restaurant in Grafton Street, Dublin. It opened a wine business in Kildare Street, in 1875. Mr Mitchell and his father, Robert, are the largest shareholders.
The wholesale business has a turnover of some £2 million while the remaining retail business has a slightly smaller turnover. The consideration includes a deferred payment which will be based on a product supply agreement. That payment will amount to around £75,000, based on the present level of business.
Under the deal, Woodford Bourne, the wholesale wine subsidiary of DCC Foods (part of DCC), acquired all the agencies and brands held by Mitchells which include Mommessin, Deinhard, Drambuie and Champagne Pommery. These will now be added to Woodford Bourne's Champagne Bollinger, Torries, Robert Mondavi, Brown Brothers. Taylors Port and A Winter's Tale.
Mr Mitchell said under the product supply agreement, his firm will continue to buy the original brands from Woodford Bourne. However, Mitchells will not be inhibited from buying new wines from new agencies.
Woodford Bourne will integrate Mitchells wholesale business into its own wine wholesaling operation. Three of Mitchells specialists will joining the Woodford Bourne sales team, creating a combined sales force of 73 with six specialists. The group is now "well balanced in the restaurant, off licence and grocery business", said Mr David Sharpe, managing director, DCC Foods.
DCC's other acquisition, Merits, has a distribution subsidiary in the US. It manufactures manual and powered wheelchairs, electric scooters and other mobility and rehabilitation products.
Most of the consideration, $ 3.34 million, (£2.024 million), will be injected into the company, in the form of new shares. Only $840,000 goes to existing shareholders.
Mr Morgan Crowe, managing director, DCC Healthcare, said Merits had "no significant amount of debt", noting that debt amounted to $1.5 million against a net worth of $5 million. The extra cash, he added, will be used to fund a development programme. Merits has annual sales of $12 million and generates profits, before exceptionals, of around $1 million.
Asked about having a minority stake, he said, DCC with 45 per cent, gets maximum protection under Taiwanese law. "We are building blocks ... until we find our feet". The other 55 per cent is owned by management and private investors. "It is logical that they will be sellers rather than buyers" over time. Also, DCC has the normal pre emption rights.
DCC said the acquisition will provide DCC Healthcare and its British based mobility products subsidiary, Days Medical Aids, "with a strategic alliance with a Far Eastern manufacturer of mobility and rehabilitation products".
