Punch buys 50% of drinks wholesaler

April 18, 2007: Punch, the UK’s largest pub operator, has formed a joint venture with Constellation Europe with each becoming 50% owners of drinks wholesaler Matthew Clark.

On a day-to-day basis, however, the business will continue to be run independently by Steve Thomson, currently managing director of Matthew Clark Wholesale Limited, and his Bristol-based team.

Punch’s investment in this joint venture is another step in its strategy to enhance the range of goods and services which the group offers to its tenants and lessees, by leveraging Matthew Clark’s wines and spirits expertise.

Matthew Clark, owned by Constellation Brands since 1998, currently offers an extensive range of branded alcoholic and soft drinks to a customer base of up to 20,000 customers in the pub, club, hotel and restaurant trades. It employs more than 1,200 staff, has a national network of depots and a fleet of more than 200 vehicles.

Under the terms of the joint venture, the business has been valued at £120m, with Punch investing £35m in cash from existing resources, and the joint venture raising approximately £50 million of new non-recourse debt, proceeds of both paid to Constellation Europe. Constellation Europe has retained an investment of £35m.

Giles Thorley, chief executive of Punch Taverns plc, said: “This is an innovative joint venture between the UK’s leading pub operator and a leading global producer and marketer of branded alcohol, with all the benefits of scale and reach you would expect.

"It will bring multiple benefits to Punch’s tenants and lessees in terms of products and services and has the potential to deliver attractive financial returns for shareholders.”