AUS
NZ
UK
CA
USA
IND
Supreme (AIM: SUP), a leading manufacturer, supplier, and brand owner of fast-moving consumer goods, has announced the acquisition of Acorn Topco Limited, the parent company of Clearly Drinks Limited. Clearly Drinks, a well-established UK manufacturer of specialized canned and bottled spring water and soft drinks, was acquired for a net cash consideration of £15 million.
Established in 1885, Clearly Drinks has a long history as a brand owner and manufacturer of soft drinks and bottled-at-source spring water. The company produces beverages in cans, glass, and polyethylene terephthalate (PET) bottles and serves around 70 customers nationwide, including major UK retailers such as Waitrose, Aldi, Tesco, Sainsbury's, and Farm Foods. In addition to manufacturing its own brands and providing private and own-label beverages for supermarkets and discounters, Clearly Drinks acts as a contract manufacturer for some of the world's largest soft drinks companies.
Clearly Drinks owns brands like Perfectly Clear, Northumbria Spring, and Revolution Waves. Its product range includes spring water (both still and sparkling), energy drinks, isotonic vitamin drinks, flavored spring water, juices, coffee-based beverages, and mixers and tonics. The company employs approximately 100 staff and operates out of a 150,000 sq. ft. freehold site, which includes three onsite natural spring water boreholes capable of accessing up to 300 million liters of fresh spring water. The facility is fully automated and has a new can line capable of producing 350 million canned drinks per year. Besides cans, Clearly Drinks can also package products in glass or PET bottles, catering to both medium and large-sized retailers.
For the year ending December 31, 2023, Clearly Drinks reported (unaudited) revenue of £22.4 million and an Adjusted EBITDA of £3.0 million, with further growth anticipated for the year ending December 31, 2024.
Strategic Rationale
The acquisition broadens Supreme's product range, increasing non-vape annualized sales to over £100 million, and to £250 million when including the Group's Vaping division. Clearly Drinks' operational footprint can leverage Supreme's vertically integrated distribution platform, enhancing sales, marketing, and product innovation opportunities. This includes the distribution and sales of branded drinks products across Supreme's established customer base of supermarkets, discounters, and online retailers.
Additionally, Supreme plans to develop more own-label products or licenses under well-recognized brands, replicating its success in the Batteries and Lighting categories. The acquisition will also facilitate further product extensions within Supreme's established Sports Nutrition & Wellness category, including wellness and energy drinks. By replicating Supreme's success in vertical integration, Clearly Drinks is expected to generate manufacturing synergies.
Supreme's acquisition of Clearly Drinks is set to be immediately earnings enhancing. This strategic move not only broadens Supreme's product offerings but also strengthens its market position, ensuring continued growth and innovation in the beverage sector.
