Fever-Tree buys Powell & Mahoney mixers
Tonic water producer Fever-Tree has purchased US-based non-carbonated cocktail mixer brand Powell & Mahoney (P&M) for US$5.9 million.
The purchase, which took place on 1 August 2022, was disclosed in Fever-Tree’s financial results for the first half of 2022.
The acquisition will provide Fever-Tree with the ‘ideal platform’ to accelerate its entry into the ‘exciting adjacent category’.
P&M operates an outsourced business model, and the group will inherit a strong relationship with a local US bottler alongside a ‘well-established’ footprint of listings within US retail.
The move is part of Fever-Tree’s ambition to expand its US-based opportunities, with the firm stating that it is encouraged by its performance in the on-trade and momentum in the off-trade.
The deal comprises a payment by Fever-Tree of US$0.7m in cash, and an additional fee of US$5.2m to settle existing debt within P&M at the acquisition date.
For the first six months of 2022, Fever-Tree recorded a 14% revenue rise, however it was affected by rising logistics prices and labour shortages.
The brand said the impact of Covid-19 and ongoing instability in Ukraine continues to be reflected in the assessment of group financial statements.
Plus, Fever-Tree expects inflationary cost pressures to have an increased impact in the second half of the year, with anticipated high costs of glass bottles combined with a ‘sustained elevation’ in gas prices being passed through by suppliers against a backdrop of limited glass availability.
A slower ‘ramp up’ of the firm’s East Coast bottling line has increased the level of UK production for the US, and transatlantic freight costs on key routes are up by approximately 50% since the beginning of the year.