Soft drinks maker Britvic PLC (LON:BVIC) is expanding its presence in Brazil with the around £54.5mln acquisition of concentrates and juice business Bela Ischia Alimentos Ltd.
The deal comes just over a year after Britvic bought Brazilian soft drinks company Empresa Brasileira de Bebidas e Alimentos SA and concentrate brands Maguary and Dafruta in Brazil in late 2015.
The Robinsons squash and J2O juice drink brands group said it will fund the purchase from existing debt facilities.
Britvic said it expects to achieve "substantial" annual cost synergies from its latest acquisition and anticipates the merger to be earnings per share accretive in the first full year of ownership.
In its last full year, Bela Ischia delivered double-digit revenue growth and underlying earnings (EBITDA) were 18.5mln Brazilian real, around £46mln..
Simon Litherland, the FTSE 250-listed firm’s chief executive officer, said: "The proposed acquisition of Bela Ischia represents an exciting opportunity to build on our very strong first year in Brazil with further expansion of our presence in a large and growing soft drinks market.”
He added: “As a result, we are confident that this complementary acquisition should create a fantastic platform to consolidate our strategic position in Brazil and generate additional shareholder value over the coming years"
Britvic expects completion of the acquisition to occur by the end of March.
In a note to clients this morning, analysts at Numis Securities, said: "This looks a sound and synergistic add-on to Ebba.
"The scale of the deal is not such that it will make much odds in the Britvic context but the purchase metrics are decent and the competitive position of Ebba will be strengthened."
In early trade this morning, Britvic shares were up 1.5%, or 8.5p at 575.5p.
-- updating with broker comment, share price --