In addition to reporting solid figures for Q3 (see H&C News report), Britvic has also announced the acquisition of Empresa Brasileira de Bebidas e Alimentos SA (“ebba”) for £120.8m.
Summary
- ebba is a high quality independent soft drinks company in Brazil;
- ebba is the number one supplier of liquid concentrates (dilutes) and the number two supplier of ready-to-drink (“RTD”) nectar drinks in Brazil;
- ebba’s key brands, Maguary and dafruta, lead the liquid dilutes category, with a growing presence in RTD nectar drinks;
- The transaction provides Britvic with immediate access to the sixth largest soft drinks market and the largest concentrates (dilutes) market globally;
- 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;
- ebba reported net revenue of R$437.2m and EBITDA of R$45.0m in its FY2014 financial statements;
- Britvic’s clear ambition is to at least double ebba’s EBITDA and significantly grow margins by 2020;
- Under the terms of the Acquisition, the enterprise value of ebba is R$580m (£120.8m), with an effective acquisition cost of R$545.4m (equivalent to £113.6m), payable in two tranches;
- The Acquisition will be partly funded from the proceeds of a placing of new ordinary shares.
Commenting, Simon Litherland, Chief Executive Officer of Britvic, said:
“The acquisition of ebba represents a unique opportunity to acquire a high quality business in a substantial soft drinks market, with exciting future growth potential. ebba operates in categories where Britvic has a proven capability of building new markets, accelerating innovation and establishing brand leadership. 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.
“ebba’s brands are particularly strong, and have a relevance to Brazilian consumers similar to the ones which Robinsons, MiWadi and Teisseire enjoy in their home markets. I am particularly pleased that the management team, led by João Caetano de Mello Neto, will continue to lead the business.
“We have identified opportunities to invest behind these leading brands, introduce new brands, and harness our group capability. As a result, we are confident we have a fantastic opportunity to drive long-term growth in the kids, family and adult categories and deliver significant shareholder value over the coming years.”
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