Blog: Olly WehringIndependent sale - cast out preconceived ideas?

Olly Wehring | 13 December 2006

The Independent Liquor sale is a story we have been following in detail since the offset, so it was great late last night when we got the call - from our source close to the matter - allowing us to be first to the line with news of a done deal.

That a private equity consortium has come out on top may surprise some industry followers. These companies, by their nature, cannot extract the synergies that drinks groups can from acquisitions so are often unwilling to enter into expensive bidding wars.

That, from what we understand, was not the case here. It looks like the battle to gain control of Independent got too rich for the likes of Lion Nathan and Diageo, whilst a consortium of Pacific Equity Partners and CCMP held its nerve.

The other assumption about private equity firms - again often wrong - is that they are in the game for the short-term gain, looking to quickly cut costs and boost value before placing the business once again on the market.

But one quote I read this morning from Grant Saligari, an analyst at Commonwealth Securities in Sydney, shed a different light on Independent’s immediate future. “Independent will generate good cash flow and the bidders can take a long-term view of the business,” he said. “Private equity have more flexibility in how they finance the business, and we can expect them to start loading Independent with debt.”


BLOG

Bad day on the beer? This'll help

If you work for a brewer and are having a rough week, take a minute to regain some perspective with this, from the good people at US craft beer producer Sierra Nevada Brewing Co....

BLOG

Brewers Association "bid" to buy Anheuser-Busch InBev strikes a chord

Is this a case of if you can't beat them, buy them?...

BLOG

Non-alcoholic beer fails the Bernstein challenge

Crazy days in the Bernstein offices. Taking time out from being one of the world’s top beverage analysts, the Bernstein team, lead by its London-based veteran Trevor Stirling, held its very own taste ...

BLOG

AG Barr launches Funkin innovation search

AG Barr has lined up a Funkin campaign in the UK to find an 'innovation champion'. ...

just-drinks homepage



Forgot your password?