Nichols, the London-listed drinks group behind Vimto, has agreed to buy VitHit for €75m (£64m), betting that growing consumer demand for healthier soft drinks can provide a new source of international growth.
The acquisition of the Irish-founded brand, established 25 years ago by former professional rugby player Gary Lavin, represents a significant expansion for Nichols as it seeks to build its portfolio beyond its established Vimto franchise.
VitHit generated €26.5m (£22.7m) in revenue last year and underlying profits of €4.1m (£3.5m). The brand is sold across 13 international markets and was created in Dublin as a lower-sugar alternative to conventional sports and energy drinks.
Lavin, who played for Leinster and Harlequins, will leave the business on completion of the transaction. Nichols said it would retain VitHit’s Dublin base and work with its existing management during the transition.
The deal values VitHit at roughly 18 times its latest underlying earnings, underlining the premium Nichols is prepared to pay for an established brand with scope for further distribution.
Andrew Milne, Nichols chief executive, described the purchase as a “strategic milestone” and said VitHit fitted the group’s preferred acquisition model of profitable brands that can be scaled without heavy investment in manufacturing infrastructure.
“VitHit perfectly fits the acquisition profile we have been looking for,” Milne said, pointing to its established market position, profitability and international growth potential.
Nichols plans to use its existing commercial relationships and distribution network to increase VitHit’s presence among retailers and expand sales in markets where the group already operates.
The opportunity reflects a broader shift in the soft drinks market, where consumers are increasingly seeking products positioned around health, hydration and lower sugar without abandoning convenience.
For Nichols, the challenge will be turning VitHit’s existing growth story into a larger international franchise without diluting the brand’s positioning.
Lavin said Nichols was the “ideal partner” for the next stage of VitHit’s development after building the company over more than two decades.
The transaction gives Nichols an opportunity to diversify its earnings while adding a profitable growth brand to a portfolio anchored by Vimto.
But with the acquisition price representing a sizeable multiple of current earnings, investors will expect Nichols to demonstrate that VitHit can deliver the “significant headroom for growth” promised by management.
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