Britain's Cadbury Schweppes Plc said on Tuesday it was to buy the 55 percent stake in Dr Pepper/Seven Up Bottling Group it does not already own for $353 million to boost its US beverage business.
The world's largest confectionery group, which makes Dr Pepper and 7UP drinks in North America, forecast synergies of $120 million by 2010, with half that realised by 2008. It said in a statement that the acquisition from Carlyle Group would enhance underlying annual earnings immediately. The maker of Dairy Milk chocolate, Trident gum and Halls cough sweets said the enterprise value of the deal was 7.1 times the business's 2005 earnings before interest, tax, depreciation and amortisation (EBITDA).
The deal "gives us greater control over the distribution of our brands; improved operating efficiencies and customer service; and greater access to faster growing water and energy drinks," chief executive Todd Stitzer said.
In November, Cadbury sold its European Orangeman and Schweppes soft drinks business for a higher-than-expected 1.85 billion euros to private equity groups Blackstone and Lion Capital.
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