Britvic mixes Irish drinks deal

Adjust font size:

Manufacturing News, Source : TheManufacturer.com
Published : 14 May 2007 15:25
Free whitepapers: Achieve Lean Success | Supply Chain Solutions

Robinsons, Tango and Pepsi drinks firm Britvic has announced that it has agreed to acquire the soft drinks and distribution businesses(CCSD) of C&C Group plc for €249.2 million (£169.5m) in cash.

CCSD owns a number of leading brands in the Republic of Ireland and Northern Ireland, including Club, Ballygowan water, Britvic, Cidona, MiWadi, and Energise Sport as well as the rights to Pepsi and 7Up brands in the territory through its bottling agreements with PepsiCo.

Commenting on the acquisition, Paul Moody, CEO of Britvic said: "This is a great opportunity to accelerate earnings growth and provides us with a leading position in the soft drinks markets in both the Republic of Ireland and Northern Ireland. Additionally, there is exciting potential for supply chain synergies, brand and product expansion and innovation. This is an important acquisition for Britvic as we seek to grow the business both within the UK and by selective international expansion. We are very pleased to welcome an experienced and highly capable CCSD senior management team and their colleagues. We believe we have many opportunities to further develop both CCSD's own brands and the Pepsi and 7Up brands in these markets."

Britvic said the transaction represented an important step in its strategic development, consolidating complementary businesses in the territory and adding to Britvic's position in Great Britain.

The transaction is expected to be earnings enhancing before integration costs in the first full year, and will cover Britvic's cost of capital in the second full year. Britvic anticipates annual pre-tax synergies of around €14 million. The anticipated integration costs to achieve these synergies will be in the region of €20-€25 million over the first three years, around half of which is estimated to be capital expenditure. One-off working capital benefits in the same period are expected total between €6 and €7 million.

This acquisition, said Britvic, represented the most significant step to date in the acquisition growth plans it highlighted at the time it flotated in 2005.