Typhoo acquired from administration for £10.2m

Supreme, a London-listed battery and vape supplier, has acquired Typhoo Tea from administration for £10.2m.

This follows last week’s appointment of finance and restructuring firm Kroll as administrator to finalise the mooted sale to Supreme and rescue the business.

The deal includes the tea firm’s stock and trade debtors with a book value of £7.5m, with Supreme expecting the integration of the business to proceed without disruption to existing operations or customer service levels.

Earlier this year, Supreme acquired Acorn Topco, the parent company of Clearly Drinks, which owns soft drinks brands including Clearly Drinks and Rola Cola. The Typhoo transaction is intended to further accelerate this diversification strategy for Supreme, bringing its non-vape annual sales to more than £120m – around 50% of the group’s revenue.

The tea brand’s new owner feels that the combination of Typhoo’s products alongside its soft drinks and sports nutrition and wellness categories will deliver further sales in channels including wholesale, as well as sparking the development of additional own-label products or licences under well-recognised brands.

Established in 1903, Typhoo was the first pre-packaged tea brand in the UK and has since expanded its product offering from traditional black and decaffeinated black teas to now include white and lemon instant flavours, herbal and fruit tea infusions, and a selection of coffees across a portfolio of brands including Typhoo itself, alongside QT, Lift and Heath & Heather.

Typhoo distributes products into both the Ministry of Defence and the NHS, alongside servicing international customers across North America, EMEA and southeast Asia.

For the year ended 30 September 2024, the tea company generated unaudited revenue of approximately £20m but made a loss before tax of approximately £4.6m. Its financial results for the year ended 30 September 2023 showed that losses widened from £9.6m in 2022 to £38m that year. Sales also fell from £33.7m to £25.3m.

Under Supreme’s ownership, it is anticipated that Typhoo will operate on a capital-light, outsourced manufacturing model, which Supreme’s board believes can generate a gross profit margin of around 30%, with a much-reduced overhead base.

Sandy Chadha, chief executive of Supreme, commented: “The acquisition of Typhoo Tea marks a significant step in our broader diversification strategy and brings one of the most iconic UK consumer brands into the Supreme family. I believe Typhoo Tea will thrive under our ownership, further benefitting from Supreme’s significant market reach and successful track record in creating brand loyalty, making us an ideal fit for this business.

“Having established our soft drinks division earlier in the year, we believe the addition of Typhoo Tea and its highly complementary blend of great value and premium tea brands, creates tangible cross sell and product innovation opportunities in the near-term.”