Supreme acquires vape brand Liberty Flights

Acquisitive FMCG distributor Supreme Imports acquired 100% of premium vape liquid manufacturer Liberty Flights in a transaction worth up to £14.5m, with CapEQ advising the vendor shareholders

Overview

Founded in Manchester in 1975 as a UK importer of goods from the Far East, Supreme Imports grew rapidly after Sandy Chadha bought the business from his father in 2003 and majored on supplying batteries.

Sandy acquired other categories to create a group of four divisions – batteries, lighting, vaping and sports nutrition – before raising £130m upon listing in 2021.

Supreme’s value-add comes from product development and manufacturing to create own brand products. With thousands of stockists including Tesco, Costco, Spar and Poundland, Supreme also sold its own ‘88vape’ discount e-liquid brand.

Liberty Flights was founded in 2009 in the UK’s vape-making hotspot of Blackburn by Matthew Moden and Abraham Spain. Riding the vaping boom, Liberty emerged as a premium brand, creating the market-leading Dot Pro device – in a joint venture.

All Liberty e-liquids are produced at its ISO-accredited automated site, and the brand has 16 retail stores across the UK.

Deal motives

Part of Supreme’s IPO cash raised was earmarked for an M&A warchest, and various acquisition targets were identified to boost revenue and margin in high-growth categories.

The vape liquid market is peppered with brands going bust and being bought out of administration. With very few sustainable success stories, Supreme had a limited pool, and vendor shareholders are generally more reluctant to sell when sales are booming.

Supreme CEO Sandy knew Matty and Abe at Liberty Flights and informal conversations began in 2021.

"Joining a bigger parent group not only creates new opportunities for us to stay ahead in the highly competitive UK vaping market, but also opens up career paths for our employees, and gives customers access to an enhanced product range.

“We are all excited to be starting a new chapter and look forward to working with Supreme’s excellent management team, who really reflect our open and ethical approach to business.

"We are excited to explore the opportunities within the Supreme group.”

Matthew Moden, Managing Director

Liberty Flights

The solution

The combination looked viable and exciting: Supreme had the reach and the funds, Liberty had the product and reputation. 50/50 shareholders Matty and Abe appointed CapEQ’s James Pugh to handle negotiations on their behalf.

Supreme agreed to acquire vaping brand Liberty Flights Holdings in a deal that worth up to £14.75m – based on £7.75 m on day one, £2 m deferred for 1 year, and up to £5m in a performance-related earn-out.

At £14.75m figure, the sale value worked out at a healthy 9.8x EBITDA multiple, based on Liberty revenues of c.£9 million.

The deal provided Supreme with access to:

a premium brand to complement its own discount offering
a well-established, reputable closed-system vaping kit to broaden Supreme’s product portfolio
access to UK convenience retail, Liberty Flights principal customer segment
Purchasing and manufacturing synergies between the two companies

Supporting a tobacco-free UK

News of the acquisition was welcomed by customers who were then able to browse and purchase the brand as part of the wider Supreme portfolio. The deal was supported by investors given the acquisition was earnings-enhancing and aligned to Supreme’s M&A criteria.

CapEQ’s James Pugh explains why we helped the Liberty Flights founders: “We support the commitment of responsible vape brands to make the UK tobacco-free. In addition, scaling up Liberty’s rechargeable kit sales via Supreme’s channels helps reduce the volume of disposable vapes polluting the environment.”

The acquisition was funded by HSBC’s credit facility, and was immediately earnings-enhancing for Supreme. The transaction value is expected to be fully paid off by 2026.

The decision to let go: What it really takes to sell a business

Join Matthew Moden, co-founder of Liberty Flights, as he reflects on his journey from broadcasting to building a successful vape brand. He shares insights on business growth, strategic exits, life post-sale, and lessons learned. Matthew also discusses his career transition, the vaping industry, and future aspirations.

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