64
DEALMAKERS
IN ASSOCIATION WITH:
By Ged Henderson
TAKING A LIBERTY
Lancashire’s position as a vaping industry hotspot has been underlined by the acquisition of one of its major manufacturers in a deal which could be worth almost £15m.
Fast growing Manchester-headquartered manufacturing and retail group Supreme, which is listed on AIM, has agreed to buy Liberty Flights Holdings, which is best known for its Liberty Flights vaping brand and the Dot Pro device.
Darwen headquartered Liberty Flights was launched as a family firm in 2009 and specialises in premium e-liquid and high-quality vaping devices, alongside distributing a large catalogue of global third-party e-liquid brands.
Its products are sold largely through convenience retailers, either directly or via wholesalers, as well as through an expanding direct to consumer online footprint.
The business recorded £9m in sales in its most recent accounts and EBITDA of £1.5m. The balance sheet of Liberty Flights also carries property with a market value of £1.3m.
From its east Lancashire base, the company has grown into one of the most respected e-cigarette brands in the UK, with an expanding international presence. It produces its XO range of e-liquids using pharmaceutical grade nicotine and bases.
Supreme is acquiring 100 per cent of Liberty Flights’ share capital on a cash-free debt-free basis from its three shareholders, Matthew Moden, Christopher Parker and Abraham Spain.
The deal, which was announced in late June, is being funded from the company’s newly established rolling credit facility with HSBC.
We are excited
to explore the opportunities within the
Supreme group
It includes a £7.75m upfront payment, a £2m deferred payment, and a further payout based on performance over the next year. This third payment could be as high as £5m but is predicted to be around £2m.
Liberty Flights will continue to trade under its own brand for 12 months before fully integrating into its new parent company.
Announcing the deal to the Stock Exchange, Supreme said the acquisition was firmly in line with its strategy to “support a tobacco free UK” by offering both credible and safer alternatives for nicotine consumption.
The acquisition is expected to be immediately earnings enhancing for the enlarged group. Supreme says there is significant product and customer overlap with the potential to enhance margins across the enlarged business.
It currently supplies products across five key categories – batteries, lighting, vaping, sports nutrition and wellness, and branded household consumer goods. The group has more than 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 and Iceland.
Sandy Chadha, Supreme chief executive, says: “We are delighted to be acquiring Liberty Flights, a business I have personally known since its inception and a brand I have long admired.
“The combination of Liberty Flights and Supreme’s existing vape offerings couldn’t be more aligned and is highly complementary
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