Completed M&A Deals - FMCG group Supreme PLC acquires Liberty Flights

FMCG group Supreme PLC acquires Liberty Flights

Supreme PLC, a leading manufacturer, supplier, and brand owner of fast-moving consumer products has announced the acquisition of Liberty Flights Holdings Limited, a leading UK vaping manufacturer best known for their Liberty Flights vaping brand and the market-leading Dot Pro device, for a total consideration of up to £14.75m.


Founded in 2010, Liberty Flights specialises in premium e-liquid and high-quality vaping devices, alongside distributing a large catalogue of global third-party e-liquid brands. The brand has a market leading position in the convenience retailer sector, supplying either directly or via wholesalers, as well as through an expanding direct to consumer online footprint.

Headquartered in Manchester, Supreme supplies products across five key categories – batteries, lighting, vaping, sports nutrition & wellness, and branded household consumer goods. The group has over 3,300 active business accounts with retail customers who manage over 10,000 branded retail outlets. Customers include B&M, Home Bargains, Poundland, The Range, Sports Direct, Londis, SPAR, Costcutter, Asda, Halfords, Iceland and HM Prison & Probation Service.

The acquisition is firmly in line with Supreme’s strategy to support a tobacco-free UK by offering both credible and safer alternatives for nicotine consumption.

Supreme CEO Sandy Chadha said: “We are delighted to be acquiring Liberty Flights, a business I have personally known since its inception and a brand I have long admired. The combination of Liberty Flights and Supreme’s existing vape offerings couldn’t be more aligned and is highly complementary across our respective manufacturing, product, and customer profiles.

“In addition, the acquisition further builds on our significant market reach in the UK, accelerating our product presence in the fast-growing pod systemmarket, a sizeable growth opportunity for Supreme.

“We look forward to welcoming Liberty Flights into the Supreme group and updating shareholders on our progress over the course of the current financial year.”

The acquisition is expected to be immediately earnings enhancing for the Group, with Liberty Flights expected to operate as a standalone entity for 12 months before being fully integrated into Supreme.

Liberty Flights Managing Director Matthew Moden added: “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.”

For the year ended 31 January 2021, Liberty Flights generated revenues of approximately £9 million and EBITDA of £1.5 million.

CapEQ Director James Pugh commented: “Many congratulations to both Liberty Flights and Supreme PLC. It’s been a genuine pleasure to help bring these companies together, and it has been self-evident through the M&A process that they are remarkably similar in their ethical and commercial approach to business. By ensuring that there was time focused on post-completion integration we are confident that both businesses will thrive. It has been an honour and fun helping Matt, Abe and Chris to achieve their goals, and we look forward to many years of on-going banter with them!”

 CapEQ’s ESG View:

The 9th June 22 Javed Khan report on smoking cessation really drives the promotion of vaping as a far safer alternative to smoking and a key tool to smoking cessation. Vaping is backed by multiple NHS trusts and cancer charities as an aid to stopping smoking with up to 68% of smokers quitting with the aid of vaping products. The Liberty Flights team have been explicit that vaping is a gateway to ceasing smoking and CapEQ was keen to support this highly successful and health focused business.

Strategic rationale

  • Immediately earnings enhancing with further manufacturing and sourcing synergies expected post-integration
  • Significant product and customer overlap with Supreme across the Group’s vaping category with potential to enhance margins across the enlarged business
  • Expands Supreme’s access to the closed system vaping market, further broadening the Group’s existing vaping proposition
  • The enlarged product range creates a strong platform from which to explore a number of cross-sell opportunities across Supreme’s existing customer base.

Transaction structure

The total consideration comprises a £7.75 million cash payment on completion of the Acquisition, a £2 million deferred payment (payable in 12 months) and an earn-out to be paid based on performance over a one-year period, subject to certain stretched performance metrics being met post the Acquisition, of up to £5 million (under current performance expectations, management estimate this will be approximately £2 million). The balance sheet of Liberty Flights carries property with a market value of £1.3 million.

Liberty Flights was advised by James Pugh and Mark Sapsford of CapEQ (Corporate Finance and Financial) and Rebecca Leask and Joe Mulrenan from HCR Law (legal). Supreme was advised by Beyond Corporate (Legal) and Cortus Advisory Group (Financial and Transaction services).

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