Fuller’s to Sell Brewing in Favour of Their Hotel and Pub Estate

Main Photo: The Hand and Flower near Olympia – a favourite for exhibitors to stay during trade shows

Date: January 2019

Location: UK wide, major play in London

Name: Fuller’s

No. of Keys: Fuller’s owns and operates over 380 pubs, inns and hotels across the south of England.

Seller: Fuller’s, – Fuller, Smith & Turner, a brewing business established in 1845

The business being sold comprises the entirety of Fuller’s beer, cider and soft drinks brewing and production, wine wholesaling, as well as the distribution thereof, and also includes the Griffin Brewery, Cornish Orchards, Dark Star Brewing and Nectar Imports.

Following Completion of the Proposed Disposal, Fuller’s will be a focused, premium pub and hotel operator pursuing its previously stated strategy of running a stylish, high quality estate, with well-located, well-invested, predominantly freehold sites that are maintained to high standards.

Buyer: Ashai Europe Ltd, a wholly owned subsidiary of Ashai Group Holdings.

Under the terms of the Proposed Disposal, AEL will acquire the brands of the Beer Business (including “London Pride”) and will receive the benefit of a licence, on a perpetual, global, exclusive and royalty-free basis, to use certain trade marks (including the “Fuller’s” name, logo and cartouche) for the provision of beverages, for an enterprise value of £250 million on a debt free, cash free basis.

Ownership of the licensed trade marks will be retained by Fuller’s.

The Board welcomes the fact that Asahi also upholds Fuller’s key values of a genuine commitment to brewing excellence and has a proven track record as a long-term steward of iconic brands making them an ideal strategic partner to the Fuller’s pubs and hotels business in the future.

The Proposed Disposal will enable Fuller’s management to focus on its pubs and hotels, which is the core of the business and where today 87 per cent of the Fuller’s operating profits are generated (excluding unallocated costs).

It will also provide significant capital to accelerate investment in the premium pubs and hotels business both organically and through future acquisitions.

Price: £250m, representing a multiple of 23.6x EBITDA (of £10.6 million for the 52 weeks ending 31 March 2018);

Net cash proceeds of the Proposed Disposal are expected to be approximately £205 million at Completion, taking into account adjustments and after estimated transaction, reorganisation and separation costs.

A return of proceeds between £55 million to £69 million of the Net Cash Proceeds is expected to be distributed to Ordinary Shareholders, representing £1.00 to £1.25 per A and C Ordinary Share and £0.10 to £0.125 per B Ordinary Share.

THPT Comment: One of the best two beers brewed in London (alongside Youngs)…interesting move to forsake it’s brewing heritage (established 1845) for the hotel stock it now has – 50 plus pubs with rooms…and no doubt good growth potential with £200m war-chest.

First Seen: Fuller’s website

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