Heineken agrees to sell Dutch soft beverage business to Royal Unibrew for US$327m
DENMARK – Dutch multinational brewing company Heineken has agreed to divest its soft drinks maker, Vrumona, to Danish brewer and beverage group Royal Unibrew for 300 million euros (US$327 million).
Vrumona B.V., based in Bunnik, Netherlands, is a manufacturer of non-alcoholic beverage products. With a strong position in both On- and Off-Trade, Vrumona is the second-largest player in the Dutch soft drinks market.
It is an established range of strong-own brands like Royal Club, Sisi, Sourcy, Sourcy Vitamin Water, and partner brands like 7 Up, Pepsi, and Rivella.
Most of the product portfolio is within the no/low sugar and calories segment, as Vrumona has been a frontrunner in healthy and functional innovations with a clear focus on wellness, healthier products, and sustainability combined with a comprehensive portfolio of winning brands.
The company name Vrumona (1953) refers to the word VRUchtenliMONAde: initially, the company focused mainly on the production of fruit lemonades.
It is in 1953 when Heineken and Bedrijfscentrale KAD set up a new joint venture called Vrumona nv, in which both parties own half of the shares despite the losses being witnessed in the soft drink business.
Royal Unibrew said in a statement it expected to close the deal in September or October and it would finance it through committed extended financing facilities with existing banks.
It also expects the acquisition of Vrumona, which is located near Utrecht in the Netherlands, to be an earnings-per-share accretive in 2024.
The transaction is dependent on one regulatory approval in a small Royal Unibrew export market as well as a customary works council process on the seller’s side of the transaction.
“Vrumona will become a new growth platform for Royal Unibrew in continental Europe and is expected to drive organic earnings growth in the coming years,” CEO Lars Jensen said.
“With the acquisition of Vrumona, we also expand our long-standing partnership with PepsiCo, as Vrumona is operating the full beverage portfolio from PepsiCo on a license agreement in a partnership dating back to 1949.”
Vrumona’s net revenue was 2022 EUR 200 million, whereas normalized EBITDA in 2022 was EUR 25 million, resulting in an acquisition multiple of (EV/EBITDA) of 12 times.
The company operates seven production lines at the facility with a current annual output of around 3.1 million hectolitres.
The acquisition of Vrumona establishes a new market platform for Royal Unibrew A/S in The Netherlands, with plans to invest in further production capabilities to grow the existing business, but also use spare capacity to support Royal Unibrew A/S’ global production footprint.
Royal Unibrew pointed out that the production facility is of high quality and high maintenance level, however, additional long-term investments are needed to replace an outdated filling line and to improve efficiencies, capacities, and capabilities.
It, therefore, expects that it will take a couple of years before the platform will be able to exploit its full organic growth potential.
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