Nichols plc (LSE:NICL) has acquired Dublin-based functional drinks company VITHIT for €75 million in cash, strengthening its exposure to the growing health and wellness drinks market. The transaction gives Nichols full ownership of the business on a debt-free, cash-free basis and adds an established low-calorie, low-sugar functional beverage brand to its existing portfolio.
VITHIT has developed strong positions in the UK and Ireland with its range of vitamin-fortified drinks. The business generated revenue of €26.5 million in 2025 and recorded an operating margin of 15.8%. Its Dublin office will remain in place following the acquisition, while the existing management team will continue to support the business during a transition period as founder Gary Lavin steps down.
Nichols expects the acquisition to be immediately earnings enhancing and is targeting annual synergies of more than €1 million. The group intends to use its established distribution network, customer relationships and international infrastructure to broaden VITHIT’s reach and accelerate the brand’s expansion into additional markets.
The €75 million purchase price is being funded entirely from Nichols’ existing cash resources. Despite the investment, the group expects to retain a net cash position and has also established a new revolving credit facility to provide additional financial flexibility. Management expects the transaction to generate returns comfortably above the company’s cost of capital.
The acquisition is projected to contribute positively to earnings per share and dividends from 2027, supporting Nichols’ wider capital allocation strategy and its focus on building a portfolio of differentiated soft drink brands. The company enters the transaction with strong financial foundations, including improved margins during 2025 and an essentially debt-free balance sheet, although weaker free cash flow conversion remains a consideration. Positive share price momentum and a reasonable valuation, alongside its dividend yield, provide further support to the broader outlook.
More about Nichols
Nichols plc is a UK-based diversified soft drinks group operating an asset-light business model across UK Packaged, International Packaged and Out of Home channels. Its portfolio is led by the Vimto brand and spans squash, flavoured carbonates, fruit drinks, energy beverages and flavoured water. Nichols also works with licensed brands including MyProtein, Levi Roots, ICEE and Sunkist, with its products sold across more than 60 countries and significant exposure to markets in the Middle East and Africa.
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