AG Barr PLC (LSE:BAG) said it has bought the functional beverage company Boost Drinks Holdings Limited for up to £32mln as part of its strategy to grow the business through targeted acquisitions.
The maker of IRN-BRU, Rubicon and Funkin said it is buying Boost from its CEO Simon Gray and his wife Alison for an initial £20mln in cash, funded from its cash reserves, with up to a further £12mln payable depending on Boost’s financial performance over the next two years.
Boost, founded by Gray in 2001, makes energy, sport and protein drinks and has a “strong” market position in the UK independent retail channel, AG Barr noted.
The company said there is “significant potential” for further growth and development of the product portfolio.
Gray will continue to lead the business, it added.
"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,” AG Barr’s CEO Roger White said in a statement.
The acquisition is expected to be EPS accretive in the first full year of ownership. Overall group operating margin will be diluted in the short term, but is expected to recover in the medium term, AG Barr said.
Boost recorded pre-tax profits of £1.9mln on revenue of £42.1mln in 2021.
“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 Group we will maintain our strong growth trajectory," said Gray.
AG Barr shares climbed 1.39% to 512.00p.