The Spar Group (SPP) on Monday, 11 August 2014, announced it had entered into an agreement whereby it will subscribe for an 80% stake in BWG Group for a purchase consideration of EUR55m.
Image: BWG Group
BWG Group is a food retail and wholesale distribution company with operations in Ireland and southwest England‚ serving 1‚100 stores‚ including 100 company-owned stores‚ with a total annual turnover of about EUR1.2bn.
BWG Group owns the Spar brand in Ireland‚ with 421 Spar stores and about 35% share of the Irish convenience store market.
Spar said some of the benefits of the transaction included a more geographically diversified revenue stream and foreign currency diversification.
"Strong synergies exist between the businesses of Spar and the BWG Group‚ particularly in relation to their retail models‚ wholesale businesses and logistics. In addition‚ the transaction provides Spar with a well-positioned international retail platform for future expansion‚" Spar said.
BWG Group would continue to be managed by the founding partners who had signed service contracts (ranging from five to eight years)‚ ensuring continuity within the businesses‚ Spar said.
"As the BWG Group has a strong operational management team‚ Spar does not anticipate relocating any of its South African executives. Spar will have a controlling interest on the board of directors and will collaborate with the operational team in Ireland‚ providing strategic input to unlock the key strategic benefits."
After the transaction‚ Spar would consolidate EUR130.6m of debt attributable to BWG Group in addition to the purchase consideration.
