Soft drinks company Britvic rose over 2 percent on Tuesday, after announcing the planned acquisition of Brazilian juice business Bela Ischia Alimentos.
An agreement for the acquisition has been made in principle for a price of R$218 million, funded from existing debt facilities. Britvic gave Bela Ischia Alimentos’ prominent position in the Brazilian market as the rationale behind the potential merger, adding another market leader Britvic’s arsenal which already includes Robinsons’ squash in the UK.
In the last 12 months, Bela Ischia delivered double digit revenue growth, reaching approximately R$160 million and an EBITDA of approximately R$18.5 million. For 2016, ebba revenues for Britvic were R$471 million up 18.6 percent on the previous year.
Commenting on the announcement, Simon Litherland, Chief Executive Officer of Britvic, 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.”
In a statement, the company said the acquisition “both strengthens Britvic’s brand portfolio in Brazil and creates a broader regional footprint by complementing the existing ebba strengths in Sao Paulo and the north east.”
Britvic (LON:BVIC) shares are currently up 1.38 percent at 574.80 (0930GMT).