The Tango and Robinsons maker said it would pay £114 million for squash-drinks firm Ebba.
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The transaction, which will be partly funded from the proceeds of a placing of new ordinary shares, provides Britvic with immediate access to the sixth largest soft drinks market and the largest concentrates market globally.
Britvic shares fell 0.9 percent to 728.5 pence at 9:14 a.m.in London after the company also reported a 1 percent increase in third-quarter revenue. Revenue in France increased 7.1pc.
Britvic has acquired Brazilian liquid concentrates and ready-to-drink nectar drinks producer Ebba in a deal worth just over £120.8m.
Worldwide Q3 revenue grew 6.8%, following a decline in the first half of the year.
The United Kingdom company said it plans to at least double Ebba’s earnings by 2020 by investing in its brands and reducing costs. “We have also executed a few fantastic marketing campaigns, including Robinsons 80 year association with Wimbledon and the Teisseire sponsorship of the Tour De France”, Litherland said.
“Despite continued challenging market conditions, we remain confident of delivering further profitable growth in 2015, in line within our guidance range of GBP164m to GBP173m”.
“We have been in dialogue with EBBA for some time and have completed a significant amount of due diligence in assessing the value and prospects of the business and the wider marketplace”.
“It’s an exciting development for us that immediately gives us national presence and distribution”, Chief Executive Officer Simon Litherland said in a phone interview Thursday.
Britvic intends to accelerate growth in ebba by building on the existing strong platform and route to market investing behind the ebba brand portfolio, extending existing brands into new sub-categories and introducing Britvic brands to the Brazilian market.
“I am pleased to see the business back into revenue growth this quarter following the investment we have made in our brands and innovation launches in each of our markets”.
The UK-headquartered soft drinks company said earlier today that sales in the nine months to 5 July were down by 2.8% on the corresponding period a year earlier. The group was bolstered by strong sales of Vimto in the UK while its export sales were hit by delayed shipments to the Yemen as a result of the ongoing conflict in the country.
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