A.G.Barr has lined up the acquisition of Groupe Rubicon.

The two UK-based companies confirmed today (5 August) that Barr, which owns the Irn Bru soft drink brand, will buy Rubicon for GBP59.8m (US$116.9m). The purchase excludes the soft drinks company's brand rights outside of the European Union other than certain neighbouring states including the Russian Federation.

"The acquisition of the Rubicon business is a great opportunity for Barr," said company chief executive Roger White. "The existing growth momentum of the Rubicon brand in the exotic juice drinks sector and the potential to build on this through its combination with Barr is an exciting prospect. The acquisition is in line with our core strategy of developing our portfolio and increasing the scale of our business through differentiated quality brands, at the same time it strengthens our position in the growing juice drinks category."

Barr said it has identified an estimated GBP1.5m in annual pre-tax cost savings achievable through improvements in the procurement of packaging, ingredients and other materials and Rubicon's supply chain and through reduced overhead costs.

The company also said that it expects the acquisition to be earnings accretive in the current financial year and will generate a return on the capital invested "in excess of Barr's weighted average cost of capital in the second full year following completion of the acquisition".

Established in 1981, Rubicon manufactures and distributes exotic juice drinks, primarily in the UK. Last year, Rubicon sales reached GBP27.3m, with operating profit totalling GBP2.2m. The company's founders, Naresh Nagrecha and Vishram Vekaria, will act as consultants to the enlarged group for two years after completion.

Separately, in a trading update, Barr said that revenue for the first 13 weeks of the financial year - beginning 27 January - increased by 4% year-on-year. Operating margins are "in line with expectations, with continued pressure from rising raw material prices being offset by product price increases and further improvements in material usage implemented during the period".