Proposed Acquisition of Group

RNS Number : 6176A

Barr(A.G.) PLC

05 August 2008

 



For immediate release                    

5 August 2008

A.G.BARR p.l.c. 

PROPOSED ACQUISITION OF GROUPE RUBICON LIMITED 

A.G.BARR p.l.c. ('Barr'), the soft drinks group, today announces that it has entered into a conditional agreement to purchase Groupe Rubicon Limited ('Rubicon') for a total initial cash consideration of £59.8 million (the 'Acquisition').  The Rubicon Group is a UK based manufacturer and distributor of branded exotic juice drinks which, in the year ended 31 December 2007, had sales of £27.3 million and an adjusted operating profit of £4.7 million¹. In view of its size, the Acquisition is subject to the approval of Barr shareholders and an Extraordinary General Meeting will be convened for this purpose.

Key benefits

The Acquisition of the Rubicon business is fully in line with Barr's core strategy of acquiring and developing strong brands.  The Acquisition:  

• will add further scale to Barr's branded business in the UK;
• will assist in diversifying Barr's product portfolio;
• will give Barr increased exposure to the juice drinks segment of the soft drinks market;
• will significantly enhance Barr's consumer and customer base; 
• will further diversify Barr's geographic strengths;
• will provide the opportunity for an identified £1.5 million of cost savings, over and above directors' non recurring charges; 
• is expected to be earnings accretive in the current financial year; and 
• is expected to generate a return on the capital invested that is in excess of Barr's weighted average cost of capital in the second full year following completion of the Acquisition. 

Furthermore the Board believes that Barr's long experience of managing and growing branded soft drinks in both the carbonates and still juice drinks segments of the soft drinks market will enable Barr to further enhance the growth potential of the Rubicon brand in the future. The Acquisition is also expected to deliver long term value to shareholders through the opportunity for enhanced sales of the Rubicon brand through a combination of improved distribution and geographical expansion of Rubicon's products through access to Barr's broader route to market and distribution capability in the UK. 

The Acquisition excludes the brand rights outside of the European Union other than certain neighbouring states including the Russian Federation.

Further information on Rubicon

The Rubicon business was established in 1981 by Naresh Nagrecha and Vishram Vekaria. Rubicon is a UK based manufacturer and distributor of branded exotic still and carbonated juice drinks employing approximately 97 people. With offices in Wembley, North London, and a dedicated manufacturing facility at Tredegar, Gwent, the business also supplements its own manufacturing capability through co-manufacturing agreements. Rubicon's carbonated drinks have been manufactured by Barr under a co-manufacturing arrangement over the last 20 years. As such, Rubicon and Barr have developed a close relationship over this period, during which time Barr has gained a good working knowledge of the Rubicon brand and Rubicon's wider business.

Barr has, simultaneous to the Acquisition, also agreed to acquire the freehold of the current production facility used by Rubicon at Tredegar for a consideration of approximately £1.25 million.

Rubicon's products are primarily sold in the UK. Rubicon's predominant route to market is via the wholesale cash and carry channel serving the impulse and convenience store market in London. In recent years, good progress has also been made by Rubicon in selling its products through larger multiple retailers on a national basis, with this sector representing approximately 19 per cent. of sales in the year ended 31 December 2007.  

The still and juice drinks category accounted for retail sales in the UK of £1.67 billion in 2007 and has shown strong growth rates in recent years, having grown in retail value terms by approximately 37.4 per cent. between 2003 and 2007².  

Financing of the Acquisition and the purchase of the Tredegar Property

The Acquisition and the purchase of the Tredegar Property will be financed from a combination of Barr's existing cash resources and New Bank Debt Facilities (a term loan and revolving credit facility totalling £70 million). This will provide the necessary funding for the Acquisition, including fees, expenses and general working capital requirements, and the purchase of the Tredegar Property.

Circular and Extraordinary General Meeting

A circular to shareholders is expected to be posted as soon as practicable containing further details of the Acquisition and the purchase of the Tredegar Property, together with a notice of the Extraordinary General Meeting to approve the Acquisition and the purchase of the Tredegar Property.

Chief Executive's comments

A.G.Barr Chief Executive, Roger White said,

'The acquisition of the Rubicon business is a great opportunity for Barr. The existing growth momentum of the Rubicon brand in the exotic juice drinks sector and the potential to build on this through its combination with Barr is an exciting prospect. The acquisition is in line with our core strategy of developing our portfolio and increasing the scale of our business through differentiated quality brands, at the same time it strengthens our position in the growing juice drinks category.'

  For further information please contact:

A.G.Barr p.l.c.             Tel: [phone]

Roger White, Chief Executive

Alex Short, Finance Director

Buchanan Communications    Tel: [phone]

Tim Thompson / Nicola Cronk

NM Rothschild & Sons         Tel: [phone]

James Murray / Susan Tribe

Rothschild, which is regulated in the United Kingdom by the Financial Services Authority, is acting for Barr and no one else in connection with the Acquisition and the purchase of the Tredegar Property and will not be responsible to anyone other than Barr for providing the protections afforded to clients of Rothschild or for providing advice in relation to the Acquisition and the purchase of the Tredegar Property.

This announcement contains forward-looking statements, which are based on Barr's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. The forward-looking statements contained in this announcement are based on past trends or activities and should not be taken as a representation that such trends or activities will continue in the future. The forward-looking statements are subject to the Risk Factors to be set out in the circular to be sent to shareholders in connection with the Acquisition and the purchase of the Tredegar Property. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables which could cause actual results or trends to differ materially, including, but not limited to: Barr's ability to successfully combine its business with the business of Rubicon; conditions in the market, market position of the companies comprising the Enlarged Group, earnings, financial position, cash flows, return on capital and operating margins, anticipated investments and economic conditions; the Enlarged Group's ability to obtain capital/additional finance; a reduction in demand by customers; an increase in competition; an unexpected decline in revenue or profitability; legislative, fiscal and regulatory developments, including, but not limited to, changes in environmental and health and safety regulations; exchange rate fluctuations; retention of senior management; the maintenance of labour relations; fluctuations in the cost of raw material and other input costs; accounting for defined benefit and other pension schemes; and operating and financial restrictions as a result of financing arrangements. No statement in this announcement is intended to constitute a profit forecast, nor should any statements be interpreted to mean that earnings or earnings per Barr share will necessarily be greater or lesser than those for the relevant preceding financial periods for Barr. Rather, these statements should be construed as references to potential enhancements to the earnings that might otherwise have been earned during the relevant financial period. Each forward-looking statement relates only as of the date of the particular statement. Except as required by the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules, the London Stock Exchange or otherwise by law, Barr expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Barr's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Appendix I contains further financial information on Rubicon.

Appendix II contains the definitions of certain terms used in this announcement.

This summary should be read in conjunction with the full text of the following announcement.

  A.G.BARR p.l.c.

PROPOSED ACQUISITION OF GROUPE RUBICON LIMITED

1. INTRODUCTION

A.G.BARR p.l.c. ('Barr') announces that it has entered into a conditional agreement to acquire all of the issued and to be issued shares of Rubicon from Zeolite Limited, Tsavolite Limited, Goshenite Limited, Diamonair Limited and optionholders who will exercise options over shares in Rubicon for a total initial cash consideration of £59.8 million, subject to certain purchase price adjustments. 

Deferred consideration of up to approximately £0.7m may be payable to certain of the sellers if a tax deduction is obtained against trading profits for corporation tax purposes of Rubicon Drinks Limited or any member of the Barr Group in respect of the exercise of EMI options by the EMI optionholders.

£6.75 million of the initial cash consideration shall be paid into an escrow account and used to satisfy purchase price adjustments and warranty claims under the share purchase agreement and tax deed to be entered into in connection with the Acquisition. Up to £3.0m of the funds in the escrow account shall be released to certain of the sellers on the first anniversary of Completion. A further amount of up to £3.0m will be released to certain of the sellers 18 months following Completion, and the balance of the escrow monies, if any, will be released to certain of the sellers on the third anniversary of Completion. 

The Rubicon Group is a UK based manufacturer and distributor of branded exotic still and carbonated juice drinks which, in 2007, had sales of £27.3 million and an operating profit of £2.2 million³. In 2007 the operating profit was calculated after deducting certain charges that will cease to be incurred following completion of the Acquisition. These relate to directors' and family members' fees and associated pension contributions of £1.9 million, exceptional bonus and pension contribution payments relating to the managing director of £0.2 million and £0.2 million respectively and a charitable donation of £0.2 million⁴. 

The Acquisition of the Rubicon Group, if approved by Barr shareholders, will add further scale to Barr's business in the UK, broaden its portfolio of brands and give Barr greater presence in the growing juice drinks segment of the soft drinks market. 

The Rubicon Group has the rights to carry on the business of production, distribution, marketing and sale of Rubicon branded drinks (including the Sun Exotic brand) worldwide although its current business is predominantly in the European Union. With effect from completion of the Acquisition, the Rubicon Group will retain such rights within the European Union and certain neighbouring states, including the Russian Federation, but will transfer the right to produce, distribute, market and sell Rubicon branded drinks in most other countries in the world to a separate company formed by the original founders of the Rubicon Group and the business in such countries will not form part of the continuing operations of the Enlarged Group.

The Acquisition is conditional upon the approval of shareholders. A circular to shareholders is expected to be posted as soon as practicable containing further details of the Acquisition and the purchase of the Tredegar Property together with a notice of the Extraordinary General Meeting to approve the Acquisition and the purchase of the Tredegar Property.

It is intended that the Acquisition and the purchase of the Tredegar Property will be financed using a combination of existing cash resources and debt finance. The debt portion will be financed pursuant to the New Bank Debt Facilities which the Company has entered into in order to fund the Acquisition (described in paragraph 5 below).

2. BACKGROUND TO AND REASONS FOR THE ACQUISITION

Barr is one of the UK's leading branded soft drinks companies with a strong and consistent track record of profit growth over the past five years. Barr has wide geographic coverage throughout the UK with a particularly strong market position in the north of England and Scotland. Barr has a diverse portfolio of soft drinks brands including IRN-BRU, Diet IRN-BRU, IRN-BRU 32, the St Clement's range, Tizer, D'N'B, KA and the Simply range. Barr manufactures, distributes and sells Orangina drinks in mainland United Kingdom under a franchise agreement. Barr also sells Rockstar energy drinks in mainland United Kingdom under a franchise agreement. Barr also owns the Strathmore spring water brand, the UK's leading ''on premise'' bottled water brand⁵.

In recent years, Barr has successfully pursued a strategy of developing differentiated brands with sustainable long-term sales growth potential. This has been achieved both organically, through innovative development of existing brands and marketing investment, and also through acquisitions and franchises of selected brands or businesses. In 2006, Barr acquired the Strathmore brand, enhancing Barr's offering in the water segment. In 2008, Barr acquired the Vitsmart brand and the Taut International business, thereby gaining early entry into the fast-growing functional drinks segment⁶.

Barr's Board believes that the Acquisition represents an excellent opportunity to acquire and develop a sustainable growth position in the still and carbonated juice drinks category and is fully in line with Barr's core strategy of acquiring and developing strong brands. The Acquisition will:

• add further scale to Barr's business in the UK;
• assist in diversifying Barr's product portfolio;
• give Barr increased exposure to the still and carbonated juice drinks segment of the soft drinks market;
• significantly enhance Barr's consumer and customer base; and
• further diversify Barr's geographic strengths.

Barr has identified an estimated £1.5 million in annual pre-tax cost savings achievable through improvements in the procurement of packaging, ingredients and other materials and Rubicon's supply chain and through reduced overhead costs. Barr expects to achieve the full benefits of these synergies in the financial year ending January 2011. Barr expects to incur one off charges of approximately £2.0 million to achieve these synergies. Barr has a strong track record of integrating acquisitions, and is confident that these savings will be achieved without disruption to the underlying operations of the Barr or Rubicon businesses.

Furthermore, the Board believes that the Acquisition can deliver long term value to Barr's shareholders for the following reasons:

• the Board believes that Barr's long experience of managing and growing branded soft drinks in both the still and carbonated juice drinks segments of the soft drinks market, underpinned by solid brand marketing capabilities, will enable Barr to further develop the current growth potential of the Rubicon brand in the future;
• the Board believes that the Acquisition will provide an opportunity for enhanced distribution and geographical expansion of Rubicon's products through access to Barr's broader route to market and distribution capability in the UK, and also Barr's presence in further channels beyond retail; and
• the Board believes that there will be benefits to be gained from exchange of best practice between the respective businesses.

The Board expects that the Acquisition will be earnings accretive in the current financial year and will generate a return on the capital invested that is in excess of Barr's weighted average cost of capital in the second full year following completion of the Acquisition.

3. INFORMATION ON THE RUBICON GROUP

3.1 General

The Rubicon business was established in 1981 and is a UK based manufacturer and distributor of branded exotic juice drinks. The Rubicon Group employs approximately 36 people at its headquarters in Wembley, Middlesex and 61 people at its dedicated manufacturing facility at Tredegar, Gwent. Barr has agreed to acquire the freehold property at Tredegar occupied by the Rubicon Group from the trustees of the Activa Enterprises Limited Retirement Benefits Scheme for cash consideration of approximately £1.25 million in conjunction with the Acquisition.

Rubicon's products are primarily sold in the UK. Rubicon's predominant route to market is via the wholesale cash and carry channel serving the impulse and convenience store market. In recent years good progress has also been made by Rubicon in selling its products through larger multiple retailers, with this sector representing approximately 19 per cent. of sales in the year ended 31 December 2007. Exports to Europe and other countries in the Territory accounted for approximately 5.1 per cent. of sales in 2007. Exports to countries outside of the Territory accounted for approximately 0.7 per cent. of sales in 2007.

Rubicon's carbonated drinks are manufactured by Barr under a co-manufacturing arrangement. Rubicon and Barr have developed a close relationship over the last 20 years, during which time Barr has gained a good working knowledge of the Rubicon brand and Rubicon's wider business. 

Rubicon's product range of exotic soft drinks falls mainly within the still and juice drinks category of the UK soft drinks market. The still and juice drinks category accounted for retail sales in the UK of £1.67 billion in 2007, accounting for approximately 12.9 per cent. of the total soft drinks market (£12.92 billion) by value and, with sales by volume of 1.38 billion litres, represented approximately 9.7 per cent. of the total soft drinks market (14.21 billion litres) in volume terms. The still and juice drinks category has shown strong growth in recent years, having grown in retail value terms in the UK by approximately 37.4 per cent. between 2003 and 2007⁷.

The growing consumption of still and juice drinks has been driven by a number of trends, as consumers with increasingly busy lifestyles are exhibiting a growing appetite for more adventurous and natural alternatives to traditional soft drinks. Drinks in this category are consumed in a wide range of contexts: as an accompaniment to meals, sport, work or play (including on-premise consumption, where still and juice drinks have a role as either an alternative or an accompaniment to coffee or alcohol). Health and wellbeing, as well as an ever-increasing variety of products, are both at the heart of the expanding still and juice drink category and drivers in the growth of the soft drinks market as a whole. The directors of Barr believe that Rubicon's product portfolio of exotic flavoured juice drinks is well positioned to take advantage of consumers' increasing demand for a variety of exotic drinks products.

3.2 Products

The Rubicon Group sells and markets a wide range of ambient still and carbonated exotic juice drinks, sold predominantly under the Rubicon brand, and also under the Sun Exotic brand. In 2007, still juice drinks represented approximately 70 per cent. of Rubicon's sales volumes by litre, with carbonated juice drinks accounting for the remainder. Rubicon's core flavours include mango, passion fruit, guava, lychee, guanabana, pomegranate and papaya. Rubicon's products are sold in a range of formats including Tetra Pak cartons, glass/PET bottles and cans. 

3.3 Financial information

A summary of the trading results for the Rubicon Group for the three years ended 31 December 2007 (on an IFRS basis) is set out below. Appendix I contains further financial information on Rubicon.  

Year ended 31 December8
	2007 (£m)	2006 (£m)	2005 (£m)
Net sales	27.3	23.3	20.0
EBITDA	2.6	(1.0)	1.2
Operating profit	2.2	(1.4)	0.7
Operating profit margin	8.0%	N/A	3.3%

Rubicon's  profit before tax for the year ended 31 December 2007 was £2.2 million. In 2007 and 2006 the operating profit was calculated after deducting certain charges that will cease to be incurred following completion of the Acquisition. These include directors' and family members' fees and associated pension contributions of £1.9 million in 2007 and £4.4 million in 2006; exceptional bonus payments in relation to the managing director of £0.2 million in 2007 and £0.2 million in 2006; pension contributions associated with the managing director of £0.2 million in 2007 and £0.2 million in 2006; and a charitable donation of £0.2 million in 2007⁹.

As at 31 December 2007, Rubicon had net assets of £6.1 million and gross assets of £9.9 million.

4. MANAGEMENT AND ORGANISATION OF THE ENLARGED GROUP

Following the Acquisition, the Enlarged Group will continue to be managed by the current executive Directors of Barr. No changes to the Board are anticipated. The integration of the Rubicon business into Barr's existing business will be overseen by Roger White (Chief Executive). A dedicated integration team comprising members of Barr's operational management, including Alexander Short (Finance Director), Jonathan Kemp (Commercial Director) and Andrew Memmott (Operations Director), will be established. This team will also include members of Rubicon's current management team.

Naresh Nagrecha and Vishram Vekaria, the founders of the Rubicon Group, have also agreed to act as consultants to the Enlarged Group for a period of 2 years following Completion in order to assist with the sourcing of fruit pulp and fruit products. 

The following individuals are deemed key to the operations of the Rubicon Group by Barr management: 

Manager	Position
Nitin Menon	Chief Operating Officer
Paul Thornton	Operations Director
Ravi Kumar Buddah	Head of Finance and IT
Barbara Down	Head of Marketing
Jitu Bhavsar	Procurement Executive

The net sales and operating profit figures have been extracted without material adjustment from the financial information contained in Appendix I of this announcement and the unaudited EBITDA and profit margin figures have been derived from such information. 

5. FINANCING OF THE ACQUISITION

The total initial cash consideration for the Acquisition will be £59.8 million, subject to certain purchase price adjustments. This consideration and the purchase price for the Tredegar Property will be financed through a combination of Barr's existing cash resources and debt finance. On 4 August 2008, The Royal Bank of Scotland plc entered into New Bank Debt Facilities with Barr under which it has committed to provide new revolving loan and term loan facilities of up to £70 million in aggregate. The New Bank Debt Facilities have been entered into for the purpose of providing part of the funding required for the Acquisition (including the Company's associated fees and expenses) and for general working capital purposes and the purchase of the Tredegar Property.

6. CURRENT TRADING AND PROSPECTS OF BARR, RUBICON AND THE ENLARGED GROUP

6.1 Barr

Barr's current trading and prospects are unchanged from the interim management statement of 10 June 2008 for the period commencing 27 January 2008, which was as follows: 

''Revenue for the first 13 weeks of the financial year increased by 4 per cent. when compared with the prior year. This is a strong performance especially when compared to an 11 per cent. like-for-like performance in the same period last year, which was boosted by above average weather and the positive impact of promotional phasing. 

Revenue performance in core carbonate brands, particularly in IRN-BRU, has been strong and overall sales have benefited from new products including Rockstar, Taut, Vitsmart and the growing St Clement's fruit drinks and smoothie range. We continue to look for suitable opportunities to develop our brand portfolio further.

Operating margins are in line with expectations with continued pressure from rising raw material prices being offset by product price increases and further improvements in material usage implemented during the period.

Our balance sheet remains strong and there have been no significant changes in the financial position of the Company since the publication of the Report & Accounts in respect of the year ended 26 January, 2008.

Outlook

Trading in May has seen the benefit of some improved weather however we continue to assume we will experience average weather conditions across the summer this year. Our trading outlook remains in line with expectations.''

6.2 Rubicon

For the financial year ended 31 December 2007, Rubicon had revenue of £27.3 million, operating profit of £2.2 million and EBITDA of £2.6 million before adjustment for non-recurring items. Rubicon has performed in line with expectations since that date.

6.3 The Enlarged Group

The Board believes that, following Completion, the Enlarged Group will be well placed to maintain and enhance its position in the branded soft drinks market in the UK and overseas. The Board has confidence in the financial and trading prospects of the Enlarged Group for the current financial year.

7. EXTRAORDINARY GENERAL MEETING

In view of its size, the Transaction constitutes a Class 1 transaction under the Listing Rules and, accordingly, it is subject to shareholders' approval at an Extraordinary General Meeting. A circular to shareholders is expected to be posted as soon as practicable containing further details of the Transaction together with a notice of the Extraordinary General Meeting to approve the Transaction.

  For further information please contact:

A.G.Barr p.l.c.             Tel: [phone]

Roger White, Chief Executive

Alex Short, Finance Director

Buchanan Communications    Tel: [phone]

Tim Thompson / Nicola Cronk

NM Rothschild & Sons         Tel: [phone]

James Murray / Susan Tribe

Rothschild, which is regulated in the United Kingdom by the Financial Services Authority, is acting for Barr and no one else in connection with the Acquisition and the purchase of the Tredegar Property and will not be responsible to anyone other than Barr for providing the protections afforded to clients of Rothschild or for providing advice in relation to the Acquisition and the purchase of the Tredegar Property.

This announcement contains forward-looking statements, which are based on Barr's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. The forward-looking statements contained in this announcement are based on past trends or activities and should not be taken as a representation that such trends or activities will continue in the future. The forward-looking statements are subject to the Risk Factors to be set out in the circular to be sent to shareholders in connection with the Acquisition and the purchase of the Tredegar Property. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables which could cause actual results or trends to differ materially, including, but not limited to: Barr's ability to successfully combine its business with the business of Rubicon; conditions in the market, market position of the companies comprising the Enlarged Group, earnings, financial position, cash flows, return on capital and operating margins, anticipated investments and economic conditions; the Enlarged Group's ability to obtain capital/additional finance; a reduction in demand by customers; an increase in competition; an unexpected decline in revenue or profitability; legislative, fiscal and regulatory developments, including, but not limited to, changes in environmental and health and safety regulations; exchange rate fluctuations; retention of senior management; the maintenance of labour relations; fluctuations in the cost of raw material and other input costs; accounting for defined benefit and other pension schemes; and operating and financial restrictions as a result of financing arrangements. No statement in this announcement is intended to constitute a profit forecast, nor should any statements be interpreted to mean that earnings or earnings per Barr share will necessarily be greater or lesser than those for the relevant preceding financial periods for Barr. Rather, these statements should be construed as references to potential enhancements to the earnings that might otherwise have been earned during the relevant financial period. Each forward-looking statement relates only as of the date of the particular statement. Except as required by the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules, the London Stock Exchange or otherwise by law, Barr expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Barr's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

  APPENDIX I

Financial information on Groupe Rubicon Limited

For the years ended 31 December 2005, 31 December 2006 and 31 December 2007

The financial information has been prepared in accordance with the requirements of the Listing Rules and a full description of the basis of preparation of the financial information (in accordance with IFRS as adopted by the European Union) will be available in the circular which will be posted to shareholders.

	2005	2006	2007
	£m	£m	£m
Revenue	20.0	23.3	27.3
Cost of sales	(11.8)	(13.6)	(15.8)
Gross profit	8.2	9.7	11.5
Distribution costs	(3.1)	(3.9)	(4.6)
Other operating income	0.1	0.1	0.2
Administrative expenses	(4.4)	(7.3)	(4.8)
Operating profit /(loss)	0.7	(1.4)	2.2

The following figures have been extracted without material adjustment from the unaudited management accounts of Rubicon for the year ended 31 December 2007 and the unaudited adjusted operating profit, EBITDA and profit margin figures have been derived from such information.

Directors' and family members' fees and pension contributions	2.6	4.4	1.9
Exceptional bonus payments (managing director)	-	0.2	0.2
Pension contributions (managing director)	-	0.2	0.2
Charitable donation	-	-	0.2
Adjusted operating profit/(loss)	3.3	3.4	4.7
Margin	16.2%	14.8%	17.1%
Depreciation	0.5	0.4	0.4
EBITDA	3.8	3.9	5.2
Margin	18.7%	16.7%	18.7%

  APPENDIX II

Definitions

''Acquisition''	the proposed acquisition of the entire issued and to be issued share capital of Rubicon;
''Barr'' or ''the Company''	A.G.BARR p.l.c., a company incorporated in Scotland with registered number SC5653 and having its registered office at Westfield House, 4 Mollins Road, Cumbernauld G68 9HD;
'Barr Group'	the Company and its subsidiary undertakings;
'Board'	the board of Directors of Barr;
'Completion'	completion of the Acquisition;
'Directors' or 'Director'	the directors or a director of Barr as at the date of this document;
''Disclosure and Transparency Rules''	the Disclosure and Transparency Rules made under Part VI of FSMA (as set out in the FSA Handbook), as amended;
''EBITDA''	unaudited earnings before interest, tax, depreciation and amortisation;
'Enlarged Group'	the Barr Group following Completion and completion of the purchase of the Tredegar Property;
''Extraordinary General Meeting'' or ''EGM''	the extraordinary general meeting of the Company, details of which will be circulated to shareholders in the circular;
'FSMA'	the Financial Services and Markets Act 2000, as amended;
'IFRS'	International Financial Reporting Standards;
''Listing Rules''	the Listing Rules made under Part VI of FSMA (as set out in the FSA Handbook), as amended;
''London Stock Exchange''	London Stock Exchange plc;
''New Bank Debt Facilities''	the term loan and revolving credit facilities to be made available to Barr pursuant to a facility agreement entered into between The Royal Bank of Scotland plc and Barr on 4 August 2008;
''Ordinary Shares''	the ordinary shares of £0.25 each in the capital of Barr;
''Prospectus Rules''	the prospectus rules made under Part VI of FSMA (as set out in the FSA Handbook), as amended;
'Rothschild'	N M Rothschild & Sons Limited, a company incorporated in England and Wales with registered number 925279 and having its registered office at New Court, St Swithin's Lane, London EC4P 4DU;
'Rubicon'	Groupe Rubicon Limited, a company incorporated in Jersey with registered number 68489 whose registered office is at PO Box 415, Templar House, Don Road, St Helier, Jersey JE4 8WH;
'Rubicon Group'	Rubicon and its subsidiary undertakings;
'Territory'	all member states of the European Union as at the date of this announcement, plus Albania, Andorra, Belarus, Bosnia and Herzegovina, Croatia, Former Yugoslav Republic of Macedonia, Iceland, Liechtenstein, Moldova, Monaco, Montenegro, North Cyprus, Norway, Russian Federation, San Marino, Serbia, Switzerland, Turkey, Ukraine and Vatican City State together with any state succeeding or emerging from any of the aforementioned states;
'Transaction'	the Acquisition and the acquisition of the Tredegar Property by Barr;
'Tredegar Property'	the freehold property known as Unit 25, Tafarnaubach Industrial Estate, Tredegar, Blaenan, Gwent NP22 3AA owned by the trustees of the Activa Enterprises Limited Retirement Benefits Scheme; and
'UK' or 'United Kingdom'	the United Kingdom of Great Britain and Northern Ireland.

All references to ''pounds'', ''sterling'', '£', ''pence'', ''penny'' and ''p'' are to the lawful currency of the United Kingdom.

¹ Appendix I contains further financial information on Rubicon.

² Source: ‘‘A Changing Climate: The 2008 UK Soft Drinks Report’’ (published by the British Soft Drinks Association).

³ Appendix I contains further financial information on Rubicon.
⁴ These figures have been extracted without material adjustment from the unaudited management accounts of Rubicon for the year ended 31 December 2007.

⁵ ‘‘On premise’’ refers to drinks to be consumed on the premises where they are sold, e.g. in bars or restaurants.
⁶ A ‘‘functional’’ drink is a drink providing a nutritional or other benefit over and above refreshment.

⁷ Source: ‘‘A Changing Climate: The 2008 UK Soft Drinks Report’’ (published by the British Soft Drinks Association).

⁸ The net sales and operating profit figures have been extracted without material adjustment from the financial information prepared on Rubicon under IFRS and the unaudited EBITDA and profit margin figures have been derived from such information.
⁹ These figures have been extracted without material adjustment from the unaudited management accounts of Rubicon for the years ended 31 December 2006 and 31 December 2007.

 

END

 

 

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