TIDMSUP
RNS Number : 5613B
Supreme PLC
11 June 2021
11 June 2021
Supreme plc
("Supreme," the "Company" or the "Group")
Acquisition of Vendek Limited for up to EUR1.82 million
- Acquisition of one of Ireland's leading distributors of batteries and lighting products
- Creates a hub from which to expand Supreme's European footprint
Supreme (AIM:SUP), a leading manufacturer, supplier, and brand
owner of fast-moving consumer products, announces the acquisition
of Vendek Limited ("Vendek"), a leading Dublin-based distributor of
batteries and lighting products, for an initial consideration of
EUR1.07 million plus deferred consideration and a performance
related earn-out of up to EUR0.75 million in aggregate (the
"Acquisition").
Vendek operates exclusively within Ireland, distributing battery
and lighting products under the Osram, Panasonic and Duracell
brands and servicing some of the country's leading retailers across
DIY, hardware, convenience, and petrol stations. The business was
founded in 1996 and is profitable, cash generative and has reported
consistent growth in recent years. For the years ended 31 December
2019 and 31 December 2020, Vendek generated revenues of c.EUR4.7
million and EUR5.6 million and adjusted EBITDA of EUR0.5 million
and EUR0.7 million, respectively. As at 31 December 2020, Vendek
had net assets of EUR2.5 million. A certain amount of the growth
achieved through 2020 can be attributed to increased demand for
Vendek's products during COVID-related lockdowns. The Acquisition
is expected to be immediately earnings enhancing for the Group.
All financials for Vendek are unaudited.
Strategic rationale
-- Acquisition expected to be immediately earnings enhancing
prior to the realisation of any revenue or cost synergies;
-- Significant product and customer overlap with Supreme across
the Group's batteries and lighting categories with potential to
enhance margins across the combined business;
-- Delivers a sizeable foothold into the Irish market, including
key distribution infrastructure and long-standing customer
relationships with some of Ireland's leading retailers, such as
Supervalu, Dunne Stores and Woodies;
-- Provides a strong platform from which to cross-sell Supreme's
additional categories including the Group's vaping brand, 88Vape,
and vitamins brand, Millions & Millions;
-- Enables Supreme to better support its existing Irish customer base; and
-- Creates an opportunity to establish a European export hub
specifically targeting countries within the EU whilst remaining
competitive.
Transaction structure
Supreme will acquire Vendek for a total consideration of up to
EUR1.82 million, which will be funded from the Company's existing
cash resources. The total consideration comprises EUR1.07 million
paid on completion of the Acquisition, EUR300,000 in deferred
consideration paid over a two-year period and a further up to
EUR450,000 earn-out to be paid over the same two period subject to
certain performance metrics being met post the Acquisition.
Sandy Chadha, Chief Executive Officer of Supreme, commented:
"We are delighted to be announcing what we believe to be a
strategic acquisition in Vendek. This is our first transaction
since our admission to trading on AIM, and not only expands our
footprint in Ireland but provides an excellent platform from which
to further penetrate the European markets.
"I have personally known this business for a number of years and
firmly believe the combination of our two Ireland operations will
significantly accelerate our growth aspirations and foster
potentially stronger levels of cross-sell opportunities across our
categories.
"We look forward to welcoming Vendek into the Supreme group and
updating shareholders on our progress over the course of the
current financial year."
Enquiries:
Supreme plc via Vigo Consulting
Sandy Chadha, Chief Executive Officer
Suzanne Smith, Chief Finance Officer
Grant Thornton UK LLP (Nominated Adviser)
Philip Secrett / Samantha Harrison / Harrison
Clarke +44 (0)20 7383 5100
Berenberg (B roker )
Chris Bowman / Mark Whitmore / Jen Clarke +44 (0)20 3207 7800
Vigo Consulting (Financial Public Relations)
Jeremy Garcia / Antonia Pollock
supreme@vigoconsulting.com +44 (0)20 7390 0230
About Supreme
Supreme supplies products across five key categories; batteries,
lighting, vaping, sports nutrition & wellness, and branded
household consumer goods. The Company's capabilities span from
product development and manufacturing through to its extensive
retail distribution network and direct to consumer capabilities.
This vertically integrated platform provides an excellent route to
market for well-known brands and products.
The Group has over 3,300 active business accounts with retail
customers who manage over 10,000 branded retail outlets. Customers
include B&M, Home Bargains, Poundland, The Range, Sports
Direct, Londis, SPAR, Costcutter, Asda, Halfords, Iceland and HM
Prison & Probation Service.
In addition to distributing globally-recognised brands such as
Duracell, Energizer and Panasonic, and supplying lighting products
exclusively under the Energizer, Eveready and JCB licences across
45 countries, Supreme has also developed brands in-house, most
notably 88Vape and has a growing footprint in Sports Nutrition and
Wellness.
www.investors.supreme.co.uk
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