Beverage giant A.G. Barr has acquired energy drink maker Boost Drinks for an initial consideration of £20m.
The Irn-Bru and Rubicon owner said it was acquiring Boost from its founder Simon Gray and his wife Alison, who will continue to lead the business.
The London-listed drink firm said there was “significant potential” for additional growth and product portfolio development, as well as giving Boost the chance to leverage A.G Barr’s scale.
As well as an initial consideration of £20m, the deal involves an additional consideration of up to £12m, dependent on future sales and profitability over two years after the takeover is completed.
Overall group operating margin will be “diluted in the short term” yet it is “expected that this will recover in the medium term,” the Funkin maker said in a statement to the London Stock Exchange on Monday morning.
Boost posted £42.1m in unaudited statutory revenue and posted £1.9m profit before tax, for the year ended 31 December 2021.
The deal was “further evidence of our strategy to continue to grow the business through targeted acquisitions,” A.G. Barr’s chief executive officer Roger White said.
Deals would take a “particular focus on developing within high growth and functional categories,” He said.
Boost’s portfolio of products – which includes its flagship energy drink, as well as iced coffee and protein drinks – “offers premium taste and performance at a competitive price,” White explained.
“I look forward to working with Simon and the team to ensure Boost continues to grow and develop under our ownership,” he said.
Simon Gray, chief executive officer of Boost Drinks who founded the brand in 2021, said he was “hugely excited to embark on the next phase of Boost’s growth with A.G. BARR.”
Gray added: “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 A.G. Barr group we will maintain our strong growth trajectory”.