AG Barr has agreed to buy fruit juice brand Frobishers and fizzy drinks brand Fentimans for Ā£51 million as the Irn-Bru maker looks to capitalise on the growth of āadult soft drinksā amid falling alcohol sales.
In its trading update released today (Feb 3), the company declared that it has agreed to acquire Fentimans for Ā£38mn and Frobishers for Ā£13mn.
The company state, "Both brands operate in the attractive Adult Soft Drinks market, which is benefitting from the consumer trend of reduced alcohol consumption. These acquisitions reflect the execution of further meaningful and targeted M&A to elevate growth through broadening the brand portfolio while providing opportunities for cost synergies."
Euan Sutherland, Chief Executive Officer, commented, "In-line with our strategy of enhancing our organic growth with M&A, we are delighted to announce the acquisitions of Fentimans and Frobishers.
"The synergies associated with these acquisitions are expected to drive meaningful accretion over the medium term. Underpinning all our activity is our consistent focus on efficiency, margin and growing shareholder returns."
The company also stated that strong brand activity is also in pipeline continuing through FY26-27, including redesigns of IRN-BRU and Rubicon and further innovation launches.
AG Barr reported a 4 per cent rise in full-year revenue to Ā£437mn. The companyās profit margin rose to 14.7 per cent, up from 13.6 per cent the year before, thanks to āongoing efficiency initiativesā and investment in its supply chain.
The company said it would integrate its two new brands by the end of next year and that efficiencies would come through in the second half of next year.
AG Barr, which was founded in 1875, is known for sugary soft drinks such as Rio and Snapple, but has been expanding into new categories such as plant-based milks, health shots and hydration powders in response to consumer demand for healthier products.
Irn-Bru makes up 33 per cent of annual group revenues, compared with 44 per cent five years ago. Rubicon accounts for 21 per cent of sales, while its ready-to-drink cocktail brand Funkin makes up 10 per cent of sales.