Supreme expands portfolio with £15m acquisition of Clearly Drinks

Supreme (AIM: SUP), a prominent UK manufacturer and supplier of fast-moving consumer goods, has strategically acquired Acorn Topco Limited, the parent company of Clearly Drinks Limited, for a net cash consideration of £15 million. This acquisition marks a significant expansion for Supreme, broadening its portfolio beyond its core offerings into the specialized beverage sector.

Founded in 1885, Clearly Drinks stands as a well-established UK manufacturer of canned and bottled-at-source spring water and soft drinks. The company services approximately 70 customers nationwide, including major retailers such as Waitrose, Aldi, Tesco, Sainsbury’s, and Farm Foods. Clearly Drinks owns notable brands such as Perfectly Clear, Northumbria Spring, and Revolution Waves, and offers a diverse range of products from spring water to energy and isotonic vitamin drinks.

Operating from a 150,000 sq. ft. facility in Sunderland, England, Clearly Drinks boasts extensive production capabilities, including three onsite natural spring water boreholes with access to up to 300 million liters of fresh spring water annually. The facility, enhanced by a multimillion-pound investment, includes a new fully automated can line capable of producing 350 million canned drinks each year.

For the fiscal year ended December 31, 2023, Clearly Drinks reported unaudited revenue of £22.4 million and an adjusted EBITDA of £3.0 million, with expectations for continued growth in the upcoming fiscal year.

The acquisition significantly extends Supreme’s product range, bringing its non-vape annualized sales to over £100 million, and £250 million including the vaping division. Clearly’s robust operational capabilities will be complemented by Supreme’s vertically integrated distribution platform, potentially enhancing sales, marketing, and product innovation. The integration allows for the development of additional own-label products and leveraging of Supreme’s established presence in the Sports Nutrition & Wellness categories.

Sandy Chadha, CEO of Supreme, emphasized the strategic fit of the acquisition: “We are delighted to be acquiring Clearly, a high-quality manufacturer and brand owner of soft drinks, which I believe delivers a significant component of our broader diversification strategy. Our enlarged business is not only gaining a strong additional pillar, which fully aligns with our Vaping, Lighting, Batteries, and Sports Nutrition & Wellness categories, but also a significant opportunity to develop and capitalize on further cross and upsell opportunities which our trusted reputation across the UK retail space facilitates.”

Clearly Drinks will continue to operate from its existing site in Sunderland, maintaining its independence within the Supreme group’s broader manufacturing operations. This strategic location, coupled with its advanced production facilities and access to natural resources, positions Clearly Drinks for sustainable growth and operational efficiency under Supreme’s ownership.

The acquisition is expected to be immediately earnings-enhancing for Supreme, reflecting the potential for significant manufacturing synergies and expanded market reach. As Supreme integrates Clearly Drinks into its portfolio, it aims to replicate its success in vertical integration, fostering a robust foundation for future growth and innovation in the beverage industry.