Collapsed firm Typhoo Tea has been bought by vapes and batteries maker Supreme after falling into administration.
The company had filed to appoint administrators last Wednesday after its sales slumped and debts rose, risking the future of the 121-year-old company.
However, London-listed Supreme confirmed talks over a deal last week and said on Monday it has completed a rescue deal to buy the historic brand.
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
Supreme chief executive Sandy Chadha
Supreme said it will pay a total of £10.2 million to buy Typhoo, in a deal which values the brand’s stock and trade debts at £7.5 million.
Typhoo generated revenues of around £20 million for the year to September 30, with a pre-tax loss of around £4.6 million.
The new owner said it plans to run Typhoo on a “capital-light, outsourced manufacturing model” in a bid to improve profits.
The collapse followed several years of declining sales, mounting debts and even a break-in at Typhoo’s Wirral factory last year.
Changing tastes are believed to be a key factor behind the lower sales. Younger people are moving away from drinking black tea and competition from coffee and soft drinks has further helped stall sales, according to research firm Mintel.
Insolvency specialists at Kroll were ultimately appointed to oversee the administration process and strike a sale deal. It is understood the business has fewer than 100 employees.
I believe Typhoo Tea will thrive under our ownership, further benefiting from Supreme’s significant market reach and successful track record in creating brand loyalty, making us an ideal fit for this business
Supreme chief executive Sandy Chadha
The move is part of a strategy by Supreme to expand its operations away from vaping, after buying soft drinks business Clearly Drinks earlier this year, before a planned Government crackdown on disposable vapes.
Chief executive Sandy Chadha said: “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 benefiting from Supreme’s significant market reach and successful track record in creating brand loyalty, making us an ideal fit for this business.”