Kevin McGoran, deputy chairman, said the deal, revealed last week in the Independent, would provide a 'major new direction for Fitzwilton'.
Food will 'become the predominant business', he said. Wellworth, owned by Gateway, has 33 stores with 824,000 sq ft of selling space. It makes considerably larger profits than the rest of Fitzwilton put together.
Fitzwilton, headed by Tony O'Reilly, is buying Wellworth through a complex, innovative mixture of shares and senior and mezzanine debt.
Wellworth is being bought by Erne Holdings, a joint venture company in which Fitzwilton will have a 42.7 per cent stake.
A 54.3 per cent stake will be held by institutional investors, fronted by County NatWest Ventures, and 3 per cent will be owned by Wellworth's management.
Fitzwilton has the option to buy out the institutional investors after one year. Mr O'Reilly will also subscribe for pounds 9m of loan stock of Fitzwilton, for which he will be granted an option over part of the company's holding in Wellworth.
Isosceles, owner of Gateway, will retain Wellworth's estimated net profits of pounds 6m since April.
For the year to last April Wellworth, which has a 21.3 per cent market share in Northern Ireland, made pounds 18.6m on pounds 236m of sales. That is 62 times the pounds 298,000 Fitzwilton made before tax in the year to June. The result, announced yesterday, was down on 1991's pounds 919,000.
The company's cash and carry operations felt the backlash of the food sector's volume declines and price deflation. Its motor dealerships saw difficult trading, with already depressed new car sales down a further 4 per cent in the first six months of this year.
Fitzwilton was also hit by its share of losses in Waterford Wedgwood, in which it has a minority stake, widening from pounds 304,000 to pounds 863,000.Reuse content