Highland Spring nears high water mark with £17.5m deal

Published on Thursday 19 November 2009 21:18

HIGHLAND Spring, the bottled water supplier, has moved a "significant" step closer to its goal of achieving £100 million in annual sales, after agreeing the biggest deal in its 30-year history.

The Perthshire firm, which is owned by the Dubai-based Al Tajir family, is swallowing the bottled water division of Irish convenience food producer Greencore Group for 17.5m.

Greencore Water owns the Campsie Spring brand, based in Lennoxtown, Stirlingshire, and Blaen Twyni in Wales.

The deal, set to be completed in the coming weeks, will see the transfer of some 120 staff to Highland Spring, taking the group's headcount to more than 400. It will also seal the company's status as the "UK's leading supplier of naturally sourced water".

Chief executive Les Montgomery said turnover this year was likely to top 54m, generating an estimated profit of 3.5m.

The acquisition of the Greencore business will take the Scots water firm "significantly closer" to its medium-term sales goal.

Montgomery said: "This deal will mark a major milestone in the history of Highland Spring and complements our expansion strategy perfectly. Our medium-term aspiration is to hit 100m, and we talk about that quite openly. Businesses can't automatically double their turnover – you have to do it in a well-managed way."

He said he was hopeful the turnover target could be achieved within "a few years", through both acquisition and organic growth, adding that the firm was "always on the lookout for further opportunities".

In 2001, the group acquired the Gleneagles Spring Water Company, while in March of this year it rescued smaller rival Speyside Glenlivet from administration.

Montgomery said Highland Spring was likely to end 2009 with its highest ever brand share of the total bottled water market, at 8.8 per cent. That would see it close the gap on brand leader Evian.

It is estimated that the bottled water market is worth almost 1.5 billion annually, with just over two billion litres consumed in the UK last year.

Founded in 1984, Campsie Spring was acquired by Greencore Group in 2001. The plant produces almost 130 million litres of own-label water for some of the UK's largest grocery chains and food service businesses. It has 108 staff.

Blaen Twyni was established in 1991 and employs 16 people producing five million litres from a site in the Brecon Beacons National Park. It was taken over by Greencore just two years ago.

Di Walker, chief executive of Greencore Convenience Foods UK, said: "Having decided to switch our focus to our core businesses, this is an excellent outcome for the future of our production centres, our staff and customers. Highland Spring is already a great success story."

The takeover is being funded by a shareholder injection from the Al Tajirs, as well as "some bank funding", Montgomery said.

Following completion of the deal, Blackford-based Highland Spring will have five bottling plants and 12 production lines with a capacity of 700 million litres a year.