Nichols (LON: NICL), the soft drinks group behind Vimto, said earlier today it has acquired 100% of functional drinks brand VITHIT for £64m cash, sending its shares up 2.4% in early trading.
The stock climbed to 1065p this morning, against Friday’s close of 1040p, within a 52-week range of 846.56p to 1226.55p.
Nichols said in a stock exchange statement that it bought VITHIT Limited and its subsidiaries for total cash consideration of €75.0m, equivalent to approximately £64m, on a debt-free, cash-free basis, meaning the buyer takes on none of the target’s debt or cash. The deal is funded entirely from Nichols’ own balance sheet, with the group remaining net cash positive, and a new revolving credit facility from NatWest, a flexible bank credit line, put in place to support working capital. Chief executive Andrew Milne said: “We are delighted to announce the acquisition of VITHIT – an outstanding brand with a differentiated product operating in a rapidly growing soft drinks category.”
VITHIT, a Dublin-founded, vitamin-fortified drinks brand with leading positions in the UK and Ireland, generated FY25 revenue of €26.5m, around £22.8m, more than 90% higher than in FY21, with an adjusted operating profit margin of 15.8%. Nichols expects annual synergies of more than €1m from the deal, against one-off transaction costs of about £2.5m, and says the acquisition will be immediately earnings enhancing, lifting earnings and dividends per share from FY27 while maintaining its existing dividend cover policy of 1.5x.
Milne said the acquisition “is expected to generate attractive returns for shareholders and strengthen our ability to deliver sustainable long-term growth.” VITHIT founder Gary Lavin will step down from day one of the deal.
Nichols will host an investor presentation on the acquisition at midday on Thursday 13 August via the Investor Meet Company platform, with the purchase price allocation under IFRS3 still to be finalised.