UK manufacturer AG Barr has acquired domestic soft-drinks brand Rio Tropical as it attempts to “rebuild” margins.
The brand was bought from independent brewer and pub group Hall and Woodhouse for £12.3m ($15m).
Rio Tropical, which produces a range of blended tropical fruit juice and sparkling water drinks, is sold in several major retailers and convenience stores across the UK, including Iceland, Londis, Budgens and Nisa.
AG Barr has marketed, sold, and distributed Rio Tropical through an exclusive licence since 2021 through its Boost Drinks division, which it brought under its wing via a £20m deal in 2022.
In addition to Boost, the organisation has a portfolio of 16 drinks brands, which include the likes of Irn-Bru, Rubicon, Moma, and Funkin.
The Rio Tropical purchase is expected to help the company reinforce its “brand-building business model”.
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“While an important contributor to the previously announced ongoing margin rebuild programme, the transaction is not expected to have a material impact on the Group’s profits for the current financial year ending 28 January 2024,” the company said in a statement.
AG Barr CEO Roger White, 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.
White added that the purchase was “a further positive indication of our strategic ambitions”.
AG Barr declined to comment on its plans for the Rio Tropical brand.
The company said its “strong net cash position” has fully financed the acquisition.
According to annual reports published in April, AG Barr’s revenue hit £317.6m in the first half of 2023, up by 18.2% on the previous year. Its adjusted profit before tax also increased by 13.3% year on year, reaching £43.5m.