Continuing its growth acquisition strategy, Breville Group Limited (BRG) has acquired Italian coffee appliances group LELIT, a designer and manufacturer of premium ‘prosumer’ home coffee equipment throughout the world. The company is rapidly growing in the premium Italian-made espresso machine and grinder market. LELIT’s management team, including the founders, have agreed to join BRG.
BRG’s last acquisition was in the first half of 2021 when it acquired Baratza, a US-based producer offering grinders from entry to light commercial purposes. Breville acquired the company for $60 million in cash and A$24 million worth of its shares.
This latest LELIT acquisition encourages Raymond to think that BRG is a buy.
“In our opinion, LELIT, the Italian-based business that BRG has acquired provides increased scale and opportunity in a competitive market where it is currently underrepresented as the company only entered Italy in FY21,” Raymond said.
“This acquisition will allow BRG to leverage its technology with a well-established Italian brand. “There is an opportunity to grow LELIT outside of Europe. This could also potentially be the start of an expanded multi-tiered brand strategy.
“BRG will pay €113m (A$169m) for LELIT. Consideration is on a half cash and half ordinary share issuance basis, subject to customary settlement adjustments.
“The new shares will be issued at $27.64 and are locked up for five years.
“The cash portion will be funded from exiting cash reserves and debt facilities.
“We have ADD recommendation on BRG,” Raymond said.
Breville Group Limited (BRG)
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
