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Britvic to acquire Bela Ischia

03 January 2017 07:14

Britvic has announced that an agreement in principle has been reached to acquire Bela Ischia Alimentos Ltda, a concentrates and juice business in Brazil, for a total cash consideration of R$218m.

Financial highlights:

- Acquisition price of R$218m, funded from existing debt facilities

- Substantial annual cost synergies

- EPS accretive in first full year Britvic says a key pillar of its strategy is to pursue international expansion by identifying and realising global soft drink opportunities in the kids, family (dilutes) and adult categories.

In its core markets Britvic has the number one family dilutes brands with Robinsons (UK), MiWadi (ROI) and Teisseire (France). In September 2015 Britvic acquired Empresa Brasileira de Bebidas e Alimentos SA and the leading liquid concentrate brands Maguary and Dafruta in Brazil, the world's largest concentrates market. Ebba has been integrated successfully into the Britvic group, and has delivered excellent results in its first year against challenging macro conditions.

It says: "Bela Ischia is a strong and well recognised consumer brand with its largest presence in the key areas of Rio de Janeiro and Minas Gerais. Its 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.

"The juice category in Brazil is made up of ready to drink (RTD) juice, liquid concentrates, and powder concentrates; the performance of all three is closely related. Bela Ischia, like ebba, competes in liquid concentrates and RTD juice. The consolidation of liquid concentrates and RTD juice will allow Britvic to strengthen its competitive offer, in particular against the larger powders brands.

"The acquisition is highly synergistic, with the combined businesses expected to realise substantial cost savings, principally from efficiencies in procurement, production, logistics and administration. In addition, revenue benefits are expected to be generated from marketing the wider brand portfolio across a broader geographical presence. The strong first year in Brazil reinforces our confidence in Brazil as a market place for Britvic products and in the capability of the combined management team, drawn from Britvic plc and the local ebba management.

"In the last 12 months, Bela Ischia delivered double digit revenue growth, reaching approximately R$160m resulting in EBITDA of approximately R$18.5m, reflecting strong volume and price growth. By way of comparison, ebba revenues in Britvic FY2016 were R$471m (+18.6% vs pro forma 2015)."

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