Rowan Gormley will now lead the combined business, having set up Naked Wines in 2008, and look to combine his company’s online and ecommerce presence with Majestic’s network of physical stores. The news comes nearly two months after former Majestic CEO Steve Lewis announced he was stepping down after 16 years on the board. Stating then that Majestic was at a “crucial stage” in development, the company hinted at an acquisition by also adding that it would look to develop its multi-channel offering. Lewis had held the CEO role since 2008 and recently oversaw a “difficult” Christmas trading period. Newly-acquired Naked Wines posted sales of £74m for 2014, 40 per cent better than the year before. Despite this the business recorded an EBITDA loss of £3.3m. Majestic Wine’s estate of over 200 stores will be combined with Naked Wines’ network of 300,000 customers. The online company’s offering involves customers funding independent winemakers across the globe in exchange for “exclusive wines at wholesale prices”. Commenting on the deal, Gormley said: “The combination of Naked Wines and Majestic provides the very existing opportunity to build a world class retailer, serving customers who are looking for inspiration that the supermarkets cannot provide. “This is great news for the customers, staff and suppliers of both businesses and will ultimately create significant shareholder value.” Read more about the wine industry:
The transaction will see an initial £50m payable on completion, in cash, with a further £20m taking the form of a contingent consideration payable in Majestic’s ordinary shares. Majestic, which has been listed on London’s Alternative Investment Market (AIM) since 1996, will secure the cash consideration by taking out new debt facilities. Phil Wrigley, chairman of Majestic, added: “The two businesses have significant strengths which are very complementary. Majestic’s distribution skills, a nationwide UK store network and customer service orientated knowledgeable staff, are a perfect fit with Naked Wines’ unique sourcing and selling model. “The acquisition will significantly accelerate the planned development of Majestic’s online capabilities whilst providing Naked Wines with a nationwide store network to allow a click and collect delivery option for its customers.” Ahead of moving into new markets such as the US and Australia, Majestic revealed it will soon announce adjusted pre-tax profit of some £21m for the year ending 31 March 2015. Naked Wines senior staff will also remain with the business and receive in excess of 70 per cent of their potential consideration in Majestic ordinary shares, which “will all be subject to performance criteria”. Read more about Naked Wines:
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