Georgia Capital PLC ("GCAP"), the ultimate owner of a 92.4% equity stake in its beer and distribution business (the “Business”), today announces that it has entered into an agreement with a subsidiary of Royal Swinkels N.V. (the latter “Royal Swinkels”) for the disposal of the Business (the “Transaction”). Following the disposal, the Business will be held through a new holding company domiciled in the Netherlands (the “Dutch Holdco”). GCAP will obtain a 20% holding in the Dutch Holdco (and Royal Swinkels 80%). The parties have put in place a put/call structure relating to the remaining GCAP 20% holding.
GCAP will realise net proceeds from the Transaction amounting to at least US$ 63.0 million. The disposal is subject to customary closing conditions, including the approval of the Georgian Competition and Consumer Agency. Completion of the Transaction and the receipt of full sales proceeds is expected before 31 December 2024.
The Transaction is in line with GCAP’s capital-light investment strategy and represents another successful completion of the full investment cycle of our private assets: to invest, to grow, and finally to monetise the investment via a cash exit. This disposal also marks further progress toward GCAP’s key strategic priority of divesting from subscale portfolio companies: we have now monetised almost 60% of the “Other1” portfolio value, representing more than 5% of GCAP’s total NAV as at 30 June 2024. In addition, the disposal will:
* Realise material cash proceeds which, in line with GCAP’s 360-degree capital management framework, are intended to be deployed in a combination of capital returns, potential investments and further enhancing GCAP’s liquidity position;
* Create significant value for GCAP shareholders, translating into a premium to the Business’ latest investment value, and a 1.8% uplift to GCAP’s NAV per share as at 30 June 2024;
* Bring an important international investor and significant industry expertise into Georgia, that will strengthen the beer and distribution business to the benefit of its customers, employees and other stakeholders; and
* Form a strategic partnership between GCAP and Royal Swinkels that will support the business at least until such time as either the put option or call option is exercised.
Under the agreement, GCAP’s 20% holding in the Dutch Holdco will be subject to an ongoing put/call option structure. The put option granted to GCAP can be exercised at a pre-agreed EV/EBITDA multiple, in each of the twelve-month periods following the approval of the audited consolidated accounts of the Dutch Holdco by shareholders for each of the financial years ended 31 December in 2028, 2029 and 2030.
The call option granted to Royal Swinkels can be exercised at a pre-agreed multiple in each twelve-month period commencing on the date of expiry of the put option and expiring twelve months after the audited consolidated annual accounts of the Dutch Holdco have been adopted by shareholders for the financial years ended 2031, 2032 and 2033.
Following the disposal, the value of GCAP’s put option will be presented under the “Listed and Observable” portfolio category on GCAP’s NAV statement.
“I am delighted to have agreed the sale of GCAP’s beer and distribution business to such a high-quality international investor and strategic purchaser, Royal Swinkels. The strong Royal Swinkels management team can add substantial value to the Business in its new period of ownership and can count fully on our support as a minority shareholder. I would like to thank our exceptional management team in the beer and distribution business, whose outstanding abilities have transformed the Business into its current successful state. Over the past three years, the Business has achieved a revenue growth rate of 29% per annum and an impressive 79% CAGR in EBITDA, significantly exceeding our expectations. For Georgia Capital, this transaction represents another successful monetisation of its private businesses, yielding significant net cash proceeds of US$ c.63.0 million. The use of the Transaction proceeds will be announced following the completion of the Transaction and receipt of the proceeds, which is expected to take place prior to the end of 2024", - Irakli Gilauri, Georgia Capital’s Chairman and CEO commented.
“We are excited to partner with Georgia Capital and the talented people in the beer and distribution business, who have played a vital role in shaping the Business into what it is today. This acquisition offers a portfolio of strong brand names, a modern brewery, strong distribution capabilities, and numerous growth opportunities. We have complete confidence in the teams and look forward to collaborating with them to drive the Business’ continued success", -
Peer Swinkels, CEO of Royal Swinkels said.
