CEDC said that it made the acquisition for approximately $2.0 million (€1.65m), adding that it had assumed approximately $500,000 of working capital debt in the all cash transaction.
As a result, the Company is raising its 2004 full year net sales guidance from $529-$539 million to $543-$553 million and 2004, which will add approximately 2 per cent on to the forecast share earning. William Carey, President and CEO of CEDC, described the transaction as strengthening the company's distribution in a very strategic region of Poland.
Carey continued, "We remain committed to our objective of obtaining $100-$120 million in net sales on an annualized basis this year through acquisitions. We are still on track to deliver approximately $50-$70 million of net sales on an annualized basis through the remainder of this year. We are also pleased to announce that the anti-monopoly office has confirmed their acceptance of our last acquisition, Miro."
However, the company also announced that another acquisition it was mooting will not go ahead. In March 2004, CEDC announced that it was conducting due diligence of a small privately held Polish distillery. Carey said that "based on the results of our due diligence, we have decided not to continue the acquisition process of this small distillery at this point in time. However, we continue to actively pursue the acquisition of Polmos Bialystok, the largest distillery in Poland."
The Polish State Treasury is still looking to privatize Polmos Bialystok by the end of 2004.
The acquisition is the company's twelth to date, marking its increasing footprint in a market that was once completely monopolized by government-owned breweries and distilleries. Only last month the company announced the acquisition of Miro, an alcohol distribution company in the southwest of the country. With the last two transactions CEDC says it has a vastly improved geographical cover in the country.
Last year the company announced the acquisition of Panta-Hurt, a Warsaw-based distributor of alcohol which it bought for $2.28 million, as well as buying debt-riddent Multi-Ex, for $1.25m. These were the company's ninth and tenth acquisitions in the Polish market respectively. The company's acquisitive streak is paying dividends. In March it announced that its first quarter turnover had increased from $79 million in 2003 to $110 million in 2004, while net profit increased 63.7 per cent to $3.1 million.
CEDC is one of the leading importers of beers, wines and spirits, as well as the largest distributor of domestic vodka on a nationwide basis, in Poland. The Company operates nine distribution centers and 60 satellite branches throughout Poland. It distributes many of the world's leading brands, including brands such as Johnnie Walker, Jose Cuervo Tequila, Beck's, Grolsch, Budweiser Budvar and Guinness Stout beers.