Sapporo Holdings Ltd., the Japanese brewer that last year said it had about $1.5 billion to spend on acquisitions, bought Florida-based juice maker Silver Springs Citrus Inc. to expand in the world’s largest economy.
The brewer agreed to pay $24 million to Toyota Tsusho America Inc. for a 51 percent stake in the orange and grapefruit juice producer, the Tokyo-based company said in a statement. The deal values Silver Springs at about 0.4 times fiscal 2011 sales, lower than the 1.08 times revenue paid for non-alcoholic beverage makers worldwide in the past 12 months, according to data compiled by Bloomberg.
Sapporo intends to improve quality at Silver Springs and to introduce drink-making technology, according to the statement. The beermaker and rivals Asahi Group Holdings Ltd. and Kirin Holdings Co. are expanding outside Japan, where an aging and shrinking population is damping sales of beer.
Sapporo gained 0.3 percent to 294 yen as of 12:57 p.m. in Tokyo trading. The shares have dropped 22 percent in the past 12 months, compared with a 16 percent drop in the benchmark Nikkei 225 Stock Average.
Sapporo President Tsutomu Kamijo in February 2011 said the company planned to spend as much as 125 billion yen ($1.5 billion at the time) to expand in North America, Southeast Asia and Japan. The more than 130-year-old company agreed last year to raise its stake in Japanese soft-drinks maker Pokka Corp. to help reduce its reliance on beer, wine and spirits, which generate about 80 percent of revenue.
Silver Springs net sales fell to $118 million in the fiscal year ended September 2011 from $122 million a year earlier and $132 million in fiscal 2009, according to Sapporo’s statement today.
The U.S. unit of Toyota Tsusho Corp., the trading arm of Toyota Motor Corp., bought the juicemaker in 1994 and introduced the Toyota production system, according to the statement.
Japan beer sales volume fell in 2011, a seventh straight year of decline.