Vaping specialist Supreme acquires rival business

Sandy Chadha, CEO, Supreme

Manufacturing and retail group Supreme has acquired a Lancashire-based vaping manufacturer and will pay up to £14.75m for the business.

Darwen-headquartered Liberty Flights Holdings Limited is best known for its Liberty Flights vaping brand and its market-leading Dot Pro device.

Founded in 2010, Liberty Flights specialises in premium e-liquid and high-quality vaping devices, alongside distributing a large catalogue of global third-party e-liquid brands.

The brand is sold largely through convenience retailers, either directly or via wholesalers, as well as through an expanding direct to consumer online footprint.

For the year to 31 January 2021, Liberty Flights generated revenues of approximately £9m and EBITDA of £1.5m.

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 £14.75m, which will be funded from the company’s newly established rolling credit facility with HSBC.

This includes a £7.75m cash payment on completion of the acquisition, a £2m deferred payment and an earn-out to be paid based on performance over a one-year of up to £5m. Under current performance expectations, management estimate this will be approximately £2m. 

Sandy Chadha, CEO of Supreme, said: “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.”

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.

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