- The deal marks the latest takeover in the group’s ongoing expansion efforts
- The takeovers are part of a strategy to ‘rebuild’ AG Barr operating profit margin
AG Barr has acquired tropical fruit drink brand Rio for £12.3million, marking the latest takeover in the Irn-Bru maker’s ongoing expansion efforts.
Rio, which AG Barr’s newly-acquired Boost Drinks division has exclusively marketed, sold and distributed since 2021, was purchased from Maidenhead-based Hall and Woodhouse.
‘Inspired by the fruits of the Brazilian rainforest, Rio is a refreshing, delicious blend of tropical flavours made to help you bring the sunny side to all of life’s adventures’, or so it claims
AG Barr told investors the acquisition was made using its ‘strong net cash position’, which stood at £47.3million at the end of July, and is not expected to have a ‘material impact’ on full-year profits.
It added: ‘With a brand building business model, and following the Boost acquisition, we have moved quickly to secure the long-term position of the Rio brand within our wider portfolio.’
The group’s first-half profits, which came in 12.6 per cent higher at £27.8million before tax, were buoyed by AG Barr’s acquisitions of energy drinks maker Boost and oat milk producer MOMA Foods.
AG Barr’s takeover spree is part of a strategy to ‘rebuild’ its operating profit margin, ‘supported by brand and portfolio development, group manufacturing optimisation and disciplined cost control’, it told investors in September.
Roger White, chief executive of AG Barr, said: ‘As brand builders we are delighted to acquire the Rio brand and secure its long-term position in our wider portfolio.
‘This allows us to realise the benefits of full brand ownership and support Rio’s continued growth. This acquisition is a further positive indication of our strategic ambitions.’
In August, AG Barr boss White declared his intention to stand down within the coming 12 months, having spent about two decades at the helm, making him one of the longest-serving CEOs of a publicly-listed UK firm.
He was the first chief executive to come from outside the Barr family when he took the top job in 2004.
Since that time, AG Barr shares have soared more than fourfold on the back of acquisitions and the sustained popularity of Irn-Bru.
His departure comes after former chairman Robin Barr, reportedly one of only three people who know the recipe for Irn-Bru, left the company in May following 58 years on its board.
AG Barr shares were up 0.8 per cent to 510p in early trading, bringing one-year gains to 16.4 per cent.