Majestic Wine to enhance its fine wine offer with acquisition

The acquisition, for£4.75m cash and£1m in net debt, will allow Majestic to offer a complete fine wine service “from the vineyard through to storage, cellar management and then secure delivery to their home, or sale within the wider fine wine market”, according to the retailer.

Altium Securities analyst David Stoddart said Lay & Wheeler is an established name in the fine wine market. He said that while it might not appeal to all customers, it “seems likely that there will be a subset of the Majestic Wine customer base that will respond to the enhancement of its offer”.

Majestic Wine said 150-year-old Lay & Wheeler made an aggregate pre-tax profit of£500,000 in the year to March 2008, and that the acquisition is expected to be “earnings enhancing” in its first full year.

Stoddart believes the deal is sensible strategically and financially. He said: “Given the importance of the Lay & Wheeler name both to customers and suppliers, we expect the name and separate buying and marketing arms to be retained.”