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(Alliance News) - AG Barr PLC, best known for making bright orange soft drink Irn-Bru, is diversifying into healthier fare.
The Cumbernauld, Scotland-based company on Monday said it has bought an initial 60% stake in porridge and plant-based milk maker Moma Foods Ltd, with an agreed path to full ownership within the next three years.
AG Barr did not announce the financial terms of the deal for the London-based business. Shore Capital, AG Barr's broker, said it thinks Moma Foods is generating GBP5.5 million to GBP6.0 million in annual sales.
AG Barr, which also makes Rubicon soft drinks and Funkin cocktails, said the deal is not expected to have an impact on profit for the financial year ending January 30, 2022.
Moma Foods was founded in 2006 by Tom Mercer in 2006 and now claims to be the UK's third largest oat milk brand.
AG Barr Chief Executive Roger White said: "I'm delighted that AG Barr is venturing into healthy oat-based products with such a great brand and an experienced team, led by Tom. Plant-based milk is a fast-growing category, in particular, and Moma's oat milk is a premium quality product with huge potential. This exciting investment is a positive indication of AG Barr's growth ambitions."
Shares in AG Barr were up 0.9% at 524.42 pence on Monday morning in London.
"We see much to like in the AG Barr investment case, with a strong portfolio of brands supporting attractive margins, strong and sustained cash generation, and a balance sheet to that provides considerable optionality as evidenced by today's announcement," Shore said.
The company said its next trading update will be in February.
By Heather Rydings; heatherrydings@alliancenews.com; and Tom Waite; thomaslwaite@alliancenews.com
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