Acquisition of Vendek Limited

11 June 2021

Supreme plc

("Supreme," the "Company" or the "Group")

Acquisition of Vendek Limited for up to €1.82 million

-      Acquisition of one of Ireland's leading distributors of batteries and lighting products

-      Creates a hub from which to expand Supreme's European footprint

Supreme (AIM:SUP), a leading manufacturer, supplier, and brand owner of fast-moving consumer products, announces the acquisition of Vendek Limited ("Vendek"), a leading Dublin-based distributor of batteries and lighting products, for an initial consideration of €1.07 million plus deferred consideration and a performance related earn-out of up to €0.75 million in aggregate (the "Acquisition").

Vendek operates exclusively within Ireland, distributing battery and lighting products under the Osram, Panasonic and Duracell brands and servicing some of the country's leading retailers across DIY, hardware, convenience, and petrol stations. The business was founded in 1996 and is profitable, cash generative and has reported consistent growth in recent years. For the years ended 31 December 2019 and 31 December 2020, Vendek generated revenues of c.€4.7 million and €5.6 million and adjusted EBITDA of €0.5 million and €0.7 million, respectively. As at 31 December 2020, Vendek had net assets of €2.5 million. A certain amount of the growth achieved through 2020 can be attributed to increased demand for Vendek's products during COVID-related lockdowns. The Acquisition is expected to be immediately earnings enhancing for the Group.

All financials for Vendek are unaudited.

Strategic rationale

·    Acquisition expected to be immediately earnings enhancing prior to the realisation of any revenue or cost synergies;

·    Significant product and customer overlap with Supreme across the Group's batteries and lighting categories with potential to enhance margins across the combined business;

·    Delivers a sizeable foothold into the Irish market, including key distribution infrastructure and long-standing customer relationships with some of Ireland's leading retailers, such as Supervalu, Dunne Stores and Woodies;

·    Provides a strong platform from which to cross-sell Supreme's additional categories including the Group's vaping brand, 88Vape, and vitamins brand, Millions & Millions;

·    Enables Supreme to better support its existing Irish customer base; and

·    Creates an opportunity to establish a European export hub specifically targeting countries within the EU whilst remaining competitive.

Transaction structure

Supreme will acquire Vendek for a total consideration of up to €1.82 million, which will be funded from the Company's existing cash resources. The total consideration comprises €1.07 million paid on completion of the Acquisition, €300,000 in deferred consideration paid over a two-year period and a further up to €450,000 earn-out to be paid over the same two period subject to certain performance metrics being met post the Acquisition.

Sandy Chadha, Chief Executive Officer of Supreme, commented:

"We are delighted to be announcing what we believe to be a strategic acquisition in Vendek. This is our first transaction since our admission to trading on AIM, and not only expands our footprint in Ireland but provides an excellent platform from which to further penetrate the European markets.

"I have personally known this business for a number of years and firmly believe the combination of our two Ireland operations will significantly accelerate our growth aspirations and foster potentially stronger levels of cross-sell opportunities across our categories.

"We look forward to welcoming Vendek into the Supreme group and updating shareholders on our progress over the course of the current financial year."

Enquiries:

About Supreme

Supreme supplies products across five key categories; batteries, lighting, vaping, sports nutrition & wellness, and branded household consumer goods. The Company's capabilities span from product development and manufacturing through to its extensive retail distribution network and direct to consumer capabilities. This vertically integrated platform provides an excellent route to market for well-known brands and products.

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.  

In addition to distributing globally-recognised brands such as Duracell, Energizer and Panasonic, and supplying lighting products exclusively under the Energizer, Eveready and JCB licences across 45 countries, Supreme has also developed brands in-house, most notably 88Vape and has a growing footprint in Sports Nutrition and Wellness.

www.investors.supreme.co.uk