A potentially transformative acquisition is on the horizon as a vape company eyes Typhoo Tea, the UK’s oldest tea brand, which recently entered administration.
- Supreme, a vape manufacturer, has informed its shareholders of advanced rescue talks, suggesting an imminent acquisition deal.
- Typhoo Tea’s financial struggles have been intensifying, with sales plummeting and debts reaching substantial figures.
- The administration process, overseen by specialists at Kroll, is aimed at finalizing a sale to rescue the struggling tea brand.
- This acquisition aligns with the vape firm’s strategy to diversify into drinks and nutrition, particularly as regulatory pressures on disposable vapes increase.
The UK’s iconic tea brand, Typhoo Tea, faces a possible change in ownership amidst its financial turmoil. Recently entering administration, Typhoo is attracting interest from Supreme, a vape company that has announced ongoing advanced talks regarding a possible purchase. While completion of the acquisition remains uncertain, the move is part of Supreme’s strategy to expand its portfolio beyond vaping. With the UK government poised to ban disposable vapes by 2025, Supreme is actively seeking diversification in its business model.
Typhoo Tea’s financial performance has been declining sharply. Last year, the brand saw its sales fall significantly by 26%, dropping from £34 million in 2022 to £25 million in 2023. Simultaneously, Typhoo’s losses soared, reaching £38 million, with mounting debts nearing £70 million. The financial strain has been compounded by an unfortunate incident at their Merseyside factory, which suffered substantial damage due to a break-in. The factory’s destruction dramatically increased their operating costs by £24 million during the financial year.
In response to these dire circumstances, Typhoo filed a notice to appoint administrators, engaging Kroll to steer through the administration process. This step is seen as a protective measure, ensuring that Typhoo can continue operations while efforts to secure a buyer are underway. A spokesperson for Kroll highlighted ongoing efforts to conclude a sale, emphasizing that administration offers a buffer to finalize negotiations, ultimately aiming to salvage the company.
Supreme’s potential acquisition of Typhoo Tea forms a part of its broader ambition to broaden its horizons in the beverage and nutrition sectors. As the vaping industry faces heightened regulatory scrutiny, diversifying its product offerings is a strategic imperative for Supreme. By acquiring Typhoo, Supreme hopes to integrate a venerable tea brand into its growth plans, reflecting its forward-looking business objectives in an evolving market landscape.
The acquisition of Typhoo Tea by a vape company may provide a lifeline to the struggling brand amidst its financial difficulties.
