Target nation: Iceland

Date announced: 03/03/08

Sponsor: FL Group

Mandated arranger: Unknown

Financing: Undisclosed

FL Group, the Icelandic investment company, has completed a successful refinancing of Refresco, the leading European private label soft drinks producer. FL Group led a buyout of Refresco in 2006 with Kaupthing Capital Partners and Vifilfell, backing the management team in a strategy which combined acquisition-based growth with capital investment for organic growth.

As part of the buy-and-build strategy, Refresco made four acquisitions in 2007 which helped Refresco grow in new markets, consolidate its position in existing markets and diversify its product portfolio. Acquisitions made were Kentpol, Nuits Saint-Georges, Histogram and Sun Beverages Company.

Sun Beverage Company and Nuits Saint Georges were acquired to provide further scale in existing markets, and Histogram was the first step for Refresco into the UK market, and Kentpol provided an entry into Poland.

The revenues of Refresco are now expected to be double that from the time when the FL-led consortium bought into it, at around €1.3bn. It is now the clear leader in the production of private label soft drinks and co-packer of A-brand drinks in Europe.

The acquisitions were financed through an SPV bridge facility and, to fully realise the synergies, the acquired companies are now being brought into the main Refresco business in conjunction with a refinancing and syndication of the SPV debt. The total debt in Refresco after the refinancing will increase to just over €500m.

As part of the refinancing FL and the other equity investors are injecting new equity into the business such that financing remains in line with the structure put in place at the time of the original acquisition. The refinancing has also put in place an acquisition facility and this combined with the continued support from the equity providers puts Refresco in a strong position to continue the buy-and-build strategy and make new acquisitions in the years ahead.