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Majestic buys Naked Wines

UK wine merchant, Majestic, has bought the online retailer Naked Wines for £70 million and appointed its founder Rowan Gormley (pictured) as CEO.

Majestic has said it expects the acquisition to “be enhancing to fully diluted earnings per share in fiscal 2017.”

In a statement Gormley said that Naked Wines had been “on the search for a new investor”, following a 40% increase in sales from 2013 to the end of 2014 to £74m.

Cavendish Corporate Finance, which advised Naked Wines on the sale said Majestic had acquired the online merchant to create “an international, multi-channel specialist wine retailing group.”, although both companies will continue to operate as independent brands.

Jonathan Buxton, partner at Cavendish, said: “The combination of Naked Wines’ robust growth track record and Majestic’s market leading positioning make this transaction an excellent strategic fit for both companies. The enlarged Majestic Wine Group will benefit from new CEO Rowan Gormley’s outstanding experience and industry expertise and help the business capitalise on supportive trends in the wine sector and the fast-growing ecommerce industry, both of which offer excellent growth opportunities.

“The UK’s premium wine segment is performing well as is the international direct to consumer market, with particularly strong growth in the US, a key area for the combined companies, while e-commerce is the fastest expanding retail market in Europe. The size of the UK’s ecommerce sector is forecast to increase by some 16% this year to close to £45 billion.

“With consumer trends in e-commerce continuing to evolve, most recently with the increase in mobile shopping and ‘click and collect’ services, we expect to see increased M&A activity as companies competing in this arena look for strategic acquisitions to expand and enhance their operations and market positioning.”

The news comes not long after the departure of longtime Majestic CEO, Steve Lewis, who stepped down “with immediate effect” in February soon after a “challenging Christmas period” and a 10.55% dip in pre-tax profits in the first six months of the 2014/2015 year.

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