Nichols, the AIM-listed maker of Vimto, said on 10 August that it had acquired Irish functional drinks brand VITHIT for €75.0m in cash.
Why Nichols plc is buying VITHIT Limited
Nichols described VITHIT as an excellent strategic fit with its plan to invest selectively in differentiated soft drinks brands, and expects returns well above its cost of capital. It plans to keep VITHIT's Dublin office.
“We are delighted to announce the acquisition of VITHIT - an outstanding brand with a differentiated product”
Deal terms and financing
Nichols acquired 100% of VITHIT Limited and its subsidiaries on a cash-free, debt-free basis, funded from balance sheet cash. The deal is expected to be immediately earnings enhancing before one-off costs of about £2.5m. NatWest will provide a new revolving credit facility for working capital, and Nichols reaffirmed its dividend cover policy of 1.5 times.
Regulatory approvals and timing
The acquisition completed on announcement.
Market context
VITHIT, founded in Dublin in 2001, makes drinks containing 100% of the recommended daily allowance of eight vitamins and grew revenue at about 9.5% a year over the past three years. Its core markets are Ireland and the UK.
