London, Aug 5 - Scottish drinks maker AG Barr said on Tuesday it had agreed to buy exotic juice firm Groupe Rubicon Limited for 59.8 million pounds ($118 million) in cash in a deal to expand into the growing juice market
"We think it's a very good deal, it's a low-executional risk. From an earnings point of view it's positive, from a debt point of view the level of debt we are taking on is relatively manageable," said Chief Executive Roger White.
AG Barr, maker of Irn-Bru, Tizer and Lipton Ice Tea, said the deal would be earnings enhancing in the current financial year and increase its exposure to the 1.7 billion pounds a year UK still and juice drink market.
UK-based Rubicon, which has been selling juices made from fruits such as mango, papaya and guava for over 20 years in England's south-east, had sales of 27.3 million pounds and an adjusted operating profit of 4.7 million pounds in 2007. Barr said it would finance the deal, which was subject to approval by shareholders, through existing cash resources as well as new bank loans.
White said group trading was in line with market based expectations and he would look at further acquisitions while continuing to grow sales organically.
"It's been an OK but not fantastic summer so far but trading remains as we expected," White said. Shares in AG Barr, which have lagged the UK beverage sector by 3 percent over the last 12 months, were up 0.4 percent at 1,150 pence by 0720 GMT, valuing the group at around 225 million pounds.