Supreme buys Liberty Flights vaping firm

Supreme plc, the Manchester fast-moving consumer products wholesaler, announced the acquisition of Liberty Flights Holdings Limited, a UK vaping manufacturer, for up to £14.75 million.

Liberty Flights Holdings is best known for its Liberty Flights vaping brand and the Dot Pro device.

For the year ended January 31, 2021, Liberty Flights generated revenues of £9 million and EBITDA of £1.5 million.

“The acquisition is expected to be immediately earnings enhancing for the group, with Liberty Flights expected to operate as a standalone entity for an initial 12-month period before being fully integrated into Supreme …” said Supreme.

“Supreme Imports Limited, a subsidiary of Supreme, will acquire 100% of the share capital of Liberty Flights on a cash-free debt-free basis, from its three shareholders, Matthew Moden, Christopher Parker and Abraham Spain, for a total consideration of up to £14.75 million, which will be funded from the company’s newly established rolling credit facility with HSBC.

“The total consideration comprises an £7.75 million cash payment on completion of the Acquisition, a £2 million deferred payment (payable in 12 months) and an earn-out to be paid based on performance over a one-year period, subject to certain stretched performance metrics being met post the acquisition, of up to £5 million (under current performance expectations, management estimate this will be approximately £2 million).

“The balance sheet of Liberty Flights carries property with a market value of £1.3 million.”

Supreme CEO Sandy Chadha said: “We are delighted to be acquiring Liberty Flights, a business I have personally known since its inception and a brand I have long admired.

“The combination of Liberty Flights and Supreme’s existing vape offerings couldn’t be more aligned and is highly complementary across our respective manufacturing, product, and customer profiles.

“In addition, the acquisition further builds on our significant market reach in the UK, accelerating our product presence in the fast-growing pod system market, a sizeable growth opportunity for Supreme.

“We look forward to welcoming Liberty Flights into the Supreme group and updating shareholders on our progress over the course of the current financial year.”