GUINNESS Ireland has made a major move into the drinks distribution business in Ireland with the acquisition of the United Beverages Holdings (UBH) in a deal which values UBH at almost £48 million.
Guinness already had a 30.8 per cent stake in UBH and has paid £12.9 million to acquire the 27.9 per cent of UBH held by James Crean, £8.6 million for Fyffes's 18.5 per cent and around £11 million to the remainder of the company held by the Byrne and Doyle families.
A further £1.8 million will be paid to the UBH shareholders, who are selling based on the group's results in the year to May 1997 and the period between now and the completion of the deal. Guinness itself has not released financial details of the acquisition, but statements from Crean and Fyffes - the two public companies with stakes in UBH - show that the company is highly profitable.
Turnover details for UBH have not been revealed by any of the shareholders involved in yesterday's acquisition by Guinness, but the group is thought to have turnover of around £80 million. Profits before tax last year were £5.5 million and aftertax profits were £4.3 million. UBH has net assets of around £29 million.
This indicates that Guinness is paying a multiple of almost 12 times aftertax profits for UBH, a high price which reflects Guinness's determination to build up a wider geographical presence in the soft drinks and bottled beer distribution business. Guinness already has its Deasy wholesaling operation in Cork and Connacht Mineral Water in Galway.
"UBH is an attractive business and will complement existing wholesaling operations," according to Guinness.
UBH is involved in the manufacturing of soft drinks and the distribution of bottled and canned beer. Its main soft drinks brand is Finches but it also distributes Cadet, Corcorans and Splash as well as Becks beer and Stonehouse cider.
UBH also distributes the Woodies alcopop drinks and distributes packaged beers for most of the major brewers, holding an estimated 27 per cent share of this sector of the market.
