AG Barr has acquired Boost Drinks for an initial consideration of £20m, on a debt free cash free basis.
Bought direct from family founder Simon Gray and his wife Alison, the transaction is entirely funded from the drinks group's strong net cash position.
The Boost brand, founded in 2001, primarily operates in the energy drink category, with a strong market position in the UK independent retail channel.
A statement from AG Barr explained that "significant potential exists" for further growth and development of the product portfolio, as well as opportunities for Boost to leverage the group’s established scale and capability, with new product development, new routes to market and operational infrastructure.
Boost operates an asset light business model, outsourcing production, warehousing and logistics.
Its management team, led by founder Simon Gray, will continue to lead the business, operating as a standalone business unit.
As well as buying the entire share capital for an initial consideration of £20m, an additional consideration of up to £12m is dependent on future revenue and profitability performance of the Boost business over a two year period from completion, payable in cash at the end of that period.
Overall group operating margin will be diluted in the short term, however it is expected that this will recover in the medium term.
For the year ended 31 December 2021, Boost’s unaudited statutory revenue and profit before tax were £42.1m and £1.9m respectively, with gross assets of £12.5m.
AG Barr's chief executive Roger White commented: “Today’s announcement is further evidence of our strategy to continue to grow the business through targeted acquisitions, with a particular focus on developing within high growth and functional categories.
“Boost is one of the UK’s most recognisable functional drinks brands, and we are delighted to welcome the team into the group.
“The Boost portfolio offers premium taste and performance at a competitive price, with a strong market position in the UK independent retail channel - with our proven track record of acquiring and developing attractive brands such as Rubicon and Funkin, I look forward to working with Simon and the team to ensure Boost continues to grow and develop under our ownership.”
Simon Gray added: “I'm hugely excited to embark on the next phase of Boost’s growth with AG Barr.
“Over the past 20 years Boost has proven its popularity with consumers who want great tasting, high performing functional drinks that offer great value for money and I am sure that as part of the AG Barr we will maintain our strong growth trajectory.”
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