The Netherlands & Georgia: Georgia Capital sells 92.4% of its beer and distribution business to Royal Swinkels

Georgia Capital PLC ("GCAP") announced on October 28 that it has entered into an agreement with a subsidiary of Royal Swinkels N.V. for the disposal of a 92.4% equity stake in its beer and distribution business (“the Business”).

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.

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.

Royal Swinkels, is an independent family business in malting and brewing with over 300 years of rich heritage. For seven generations, the Swinkels family has led a group of companies that consists of 8 breweries and 2 malt houses. This ensures a presence in a broad playing field within various domains, including beer, soft drinks, craft soda, energy drinks, malt, malt extract and real estate. Royal Swinkels is active in 150 countries with a portfolio that contains over 300 beers. Worldwide, approximately 2,000 employees work at Royal Swinkels on its ambition to continuously do business in a smarter and more sustainable way.

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