Britvic to buy Brazil's Bela Ischia for £54.5m
FTSE 250 drinks maker Britvic has agreed to buy Brazilian concentrates and juice business Bela Ischia Alimentos for 218m Brazilian reals (£54.5m).
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The deal, which will be funded from existing debt facilities, is expected to be accretive to earnings per share in the first full year and will generate “substantial” annual cost synergies, primarily from efficiencies in procurement, production, logistics and administration.
Britvic said the acquisition strengthens its brand portfolio in Brazil and creates a broader regional footprint by complementing the existing Ebba strengths in Sao Paulo and the north east.
Like Brazilian squash manufacturer Ebba, which Britvic bought in 2015, Bela Ischia competes in liquid concentrated and ready-to-drink juice. The company said the consolidation of liquid concentrates and RTD juice will allow it to strengthen its competitive offer, in particular against the larger powders brands.
Chief executive Simon Litherland said: "The proposed acquisition of Bela Ischia represents an exciting opportunity to build on our very strong first year in Brazil with further expansion of our presence in a large and growing soft drinks market. Bela Ischia operates in a category where Britvic has proven capability of generating growth, launching new products and establishing brand leadership and is an excellent complementary fit with our existing business.
“Our due diligence to date has identified significant cost synergies and potential further revenue benefits arising from a broader brand portfolio and geographical presence. As a result, we are confident that this complementary acquisition should create a fantastic platform to consolidate our strategic position in Brazil and generate additional shareholder value over the coming years."
Numis said the deal looks like “a sound and synergistic add-on to Ebba”.
“The scale of the deal is not such that it will make much odds in the Britvic context but the purchase metrics are decent and the competitive position of Ebba will be strengthened.”
At 1055 GMT, Britvic shares were up 1% to 572.88p.