C&C picks up 47% stake in pubco Admiral Taverns

C&C Group, producers of Magners cider, announced on Monday that it had reached an agreement, along with US investors Proprium Capital Partners, to acquire Admiral Taverns.

The equity investment of £37m from C&C would represent 47% of Admiral's issued capital and would be funded from the firm's existing facilities.

C&C said the investment should deliver significant economic and route-to-market benefits to its UK business, mostly in England and Wales, through the direct access granted to Admiral's sites, 95% of which were freehold or long leasehold, via a procurement and supply agreement.

C&C chief executive, Stephen Glancey, said "Admiral management has a proven track record in balancing these returns with the needs of their tenants and consumers. Today's new arrangements will enhance choice for both tenants and consumers and provide a platform for further growth at Admiral."

The investment was anticipated to be backed up by mid-single digit earnings and a return on equity in the first full financial year following completion of the acquisition.

It also announced Admiral's existing management team would stay in place to run its 845 pubs.

In its audited accounts for the year ended 28 May 2016, Admiral had an underlying EBITDA of £25.2m, an underlying EBITDA margin of 36.2% and gross assets of £231.8m.

The transaction, subject to FCA approval, was expected to be completed by 30 November.

"For C&C, this is an attractive opportunity to create a new long term investment in the important on-trade channel, without taking significant financial and operational risk. The investment will provide our brands with improved distribution in some of the best community pubs across the UK, with an opportunity to enhance on-trade penetration further over time," said Glancey.

As of 1115 BST, shares in C&C were holding steady, up just 0.09% to €3.06 each.