Having built up a relationship with the founder and co-owner Naresh Nagrecha, we both investigated the market for potential acquisition opportunities and monitored the prospect of a sale of the business.
Rubicon was founded in 1981 with a single brand called Passionade by Naresh Nagrecha and Vish Vikera who had worked together at Unilever in West Africa. The company was the result of Vish’s gut instinct (excuse the pun) for developing flavours for specialist markets in the UK for exotic fruit juices, and Naresh’s commercial ability developing business with Convenience stores and independent retailers. By the time of sale Rubicon was available in all major supermarkets with the company producing over 50m litres per year from a production facility of 15,000 sqft and warehousing of 18,000sqft. Sales were forecast to be £34m resulting in operating profit of c.£4.5m.
Having monitored the market-place for some time it became apparent that a number of the major players that had been isolated in our preliminary research were actively seeking targets, this included soft drinks brand owners from around the world, food manufacturers and sector specific private equity houses. With a small number of the more left-field acquirers showing real intent we furnished these parties with sufficient information to put together outline proposals. We then went to the remaining market, with the more obvious bidders approached last (including Britvic & AG Barr). With a number of bidders in a similar range we held a second round of bids.
After some detailed negotiations, the offer from AG Barr PLC was accepted as the best combination of value, protection of staff and deliverability. Their advisors NM Rothschild and Deloitte carried out financial due diligence. AG Barr had to request shareholder approval as a PLC carrying out a Class 1 transaction representing a value greater than 25% of its market capitalisation. The sale of Groupe Rubicon for the European region (Middle East and USA were held back) and its UK based production facility was completed for a consideration of £59.8m plus £1.25m for the production facility in South Wales.
The acquisition is a great opportunity for Barr. It is in line with our core strategy of developing our portfolio and increasing the scale of our business through differentiated quality brands, at the same time it strengthens our position in the growing juice drinks category.
AG Barr CEO, Roger White
