Retail group BWG has sold its Northern business to management four months after failing to agree a deal with a rival group.
J&J Haslett operates the Mace franchise in the North as well as a cash & carry operation and has an annual turnover of £213 million sterling (€303 million).
BWG, which has been selling non-core assets since the company's own management bought it out from French drinks group Pernod Ricard, said the disposal would allow BWG concentrate on its key symbol brands of Spar and Mace in the Republic and Bargain Booze in Britain.
The group was in talks with rival food distributor Henderson - which holds franchises in the North for Spar, Vivo and VG - on the sale of Haslett's last summer but the negotiations broke down after the two parties failed to agree a price.
BWG chief executive Mr Leo Crawford said Haslett management had approached the parent group in the aftermath of the talks' collapse to sound out the possibility of an MBO.
It declined to disclose a price for the current management buyout but analysts said food retailing businesses could expect to sell for mid-teen multiples of net earnings.
In the case of Haslett's, this would indicate a price of up to £25 million sterling.
Mr Crawford said the money raised by the group's recent asset disposals and other moves - thought to be around €130 million - would help reduce the group's debt. The €220 million MBO that saw Mr Crawford take BWG out of Pernod Ricard was funded mostly by Electra Partners Europe private equity group.
Mr Crawford said last night that the latest disposal meant the balance sheet was now in a position where the group could look at the structure of its debt next year. He also stressed that BWG's sale of non-core operations should not be taken as ruling out any interest in expansion, pointing to its acquisition earlier this year of the Tolan Foodservice group in Galway.
BWG also announced plans last May to expand the 400-strong Irish Spar chain by 100 stores by the end of 2005 in a €200 million investment which would add 1,000 jobs to the 7,500 already employed through the franchise.
Haslett's operates franchises for Mace, Nearbuy and XL Stop in the North. It also runs the Holmes Cash & Carry, Holmes vending and Holmes Catering Services businesses.
It employs 500 staff directly, with a further 2,000 working through its retail outlets.
The Northern Ireland group was acquired in 1994 by BWG when the latter was part of Irish Distillers, prior to the Pernod Ricard takeover. At the time it was the largest wholesaler in Northern Ireland, with turnover of £150 million and profits of £3 million plus.
Profitability has since declined. The most recent figures available show that the group made net profits of almost £1.7 million on turnover of £213 million in 2002. Stripping out exception charges that dragged the company to a loss in 2001, turnover and operating profit were down last year.
In a statement announcing the deal yesterday, Mr Crawford said: "We are delighted to have reached agreement with the management team and wish all the 500 staff at J&J Haslett every success in the future."
Mr Michael Hamilton, the newly-appointed managing director of J&J Haslett said staff at the group were delighted by the deal. "We look forward to delivering a business strategy to continue to improve the service that J&J Haslett has provided for over 100 years," he said.
"We are confident the company has much to offer the Northern Ireland independent retail sector in the years ahead."
The sale leaves BWG with the Mace franchise in Leinster and Munster. It also holds the Spar franchise for the State and, through Appleby Westward for the south-west of England. In addition, it operates the rapidly-expanding British drinks wholesaler and franchise Bargain Booze and a food wholesale operation.
