Vimto owner Nichols has agreed to buy VITHIT for €75 million (£64 million), giving the London-listed drinks group control of a profitable health and wellness beverage brand with an established international presence.
The acquisition takes Nichols further beyond its traditional soft-drink business. Instead of building a new health-focused brand from scratch, the company is buying a business that generated €26.5 million (£22.7 million) of revenue and €4.1 million (£3.5 million) of underlying profit last year.
VITHIT was founded in Dublin more than 25 years ago by Gary Lavin, a former professional rugby player who represented Leinster and Harlequins. Lavin developed the drinks as a healthier alternative to sugary sports beverages, and the brand has since expanded into 13 overseas markets.
Why Nichols is paying ÂŁ64 million for VITHIT
The financial figures put the size of the deal into perspective. The €75 million purchase price is equivalent to roughly 2.8 times VITHIT’s latest annual revenue and about 18.3 times its underlying profit, based on the numbers announced with the transaction.
Nichols is therefore paying for more than VITHIT’s current earnings. A central part of the investment case is the opportunity to expand the brand using Nichols’ customer relationships, distribution network and international infrastructure.
Nichols chief executive Andrew Milne said VITHIT’s established market position, profitability, growth potential and compatibility with the group’s asset-light operating model made it a strong strategic fit. Investors can follow the company’s financial results and corporate announcements through the official Nichols investor centre.
The distribution opportunity could be particularly important. Nichols believes it can introduce VITHIT to more customers through relationships the group already has, potentially allowing the brand to expand without having to create an entirely separate route-to-market network.
The move also comes as major beverage companies look for growth beyond conventional fizzy drinks. PepsiCo made a much larger investment in the functional beverage category with its acquisition of Poppi, explored in our analysis of the PepsiCo Poppi acquisition and functional drinks strategy.
While the size and circumstances of the two transactions differ, both highlight the value established drinks companies see in brands positioned around changing consumer preferences.
Gary Lavin steps down as VITHIT changes hands
The sale also closes a major chapter for Lavin. After more than 25 years building VITHIT from Dublin into an internationally available brand, he will step down from day one of Nichols’ ownership.
Lavin said VITHIT’s ambition had always been to create a distinctive health and wellness drinks brand with broad consumer appeal, and described Nichols as an ideal partner for its next stage of development.
Nichols plans to retain VITHIT’s Dublin office. The existing management team will support the business, although some members are expected to leave following a transition period.
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That provides some continuity for employees, customers and commercial partners even as ownership and parts of the leadership structure change.
VITHIT also gives Nichols a proposition distinct from Vimto. While Vimto is an established traditional soft-drink brand, VITHIT is positioned around vitamins, lower sugar and health-conscious refreshment. Nichols can therefore address different consumer occasions while potentially sharing commercial and distribution resources behind the brands.
The acquisition arrives during an active period of portfolio changes across the global drinks industry. Another example is the $2.3 billion Diageo-Asahi drinks deal, illustrating how beverage groups continue to reassess brands, geographic exposure and opportunities for future growth.
For Nichols shareholders, attention will now shift from the purchase price to execution. VITHIT is already profitable, but a €75 million valuation places pressure on Nichols to generate meaningful additional growth from the business.
Milne believes Nichols’ commercial capabilities, customer relationships, route-to-market expertise and international infrastructure can accelerate that process. In particular, management sees an opportunity to expand VITHIT distribution across the group’s existing customer base.
There are still risks. More distribution does not automatically produce stronger demand, while expansion into additional markets can require marketing investment and retailer support. Nichols will also need to preserve the identity that helped VITHIT establish itself in the health and wellness category.
For consumers, immediate changes may be limited. The Dublin office will remain and Nichols is buying VITHIT because it sees value in the brand that already exists.
For Lavin, the transaction marks the end of a journey from professional rugby to building an international drinks business. For Nichols, the challenge is now to turn VITHIT’s €26.5 million revenue, €4.1 million underlying profit and presence across 13 overseas markets into enough future growth to justify its ÂŁ64 million investment.
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