Marston's disposes of stake in Carlsberg JV

Wolverhampton-based company Marston's has disposed of its 40% stake in its brewing joint venture with Carlsberg to become a business entirely focused on pubs.

Marston's said on Monday that it has reached a binding agreement with Carlsberg to offload its share of the JV for £206.0m, establishing it as a "purely focused pub business", with a "strong position" in the UK market and "significant opportunities" for further growth.

The London-listed group highlighted that the sale sees it deliver on its stated de-leveraging strategy, creating a "stronger balance sheet" and a "step change" in financial flexibility.

Martston's said the sale price was at an "attractive valuation", representing an enterprise value multiple of 14.5x EBITDA and 24.3x EBIT for the 12-months period ended 31 December.

Net proceeds from the sale will be used for "significant debt paydown", achieving the company's medium-term target of less than £1.0bn of net debt in a "significantly accelerated time frame.

Chief executive Justin Platt said: "Today's announcement represents a significant milestone for Marston's as we realise our stake in CMBC. In my first six months with the business, it has become very clear to me that our core capability and key opportunity to unlock value for shareholders is in driving a focused and successful pub business.

"This deal further strengthens our balance sheet, significantly reducing our debt by over £200.0m. In addition, CMBC remain valued strategic partners and we continue to benefit from our ongoing long-term brand distribution agreement with them. Crucially, it allows us to become a pure play hospitality business and focus on what we do best - namely, giving our guests amazing pub experiences."

As of 0955 BST, Marston's shares were up 12.41% at 34.51p.

Reporting by Iain Gilbert at Sharecast.com