Blackford, Perthshire-based Highland Spring will take over Campsie Spring in Lennoxtown, East Dunbartonshire, and Blaen Twyni in Wales, which supply own brand water to customers such as supermarkets.
This will boost its output from 230m litres a year to 350m litres. But the combined entity, with 400 employees, five bottling plants and 12 production lines, will have a capacity of 700m litres.
Highland Spring has pledged to retain the 124-strong workforce, of whom 108 work at Campsie Spring.
Les Montgomery, chief executive of Highland Spring, said the attraction of the purchase, funded by owners the Al Tajir family of Dubai and bank finance, was that it gives the company greater scale.
“We have access to a lot more water and more production capacity,” he said.
It also gives Highland Spring access to a new set of customers. At the moment most output from Highland Spring is under its own brand which is promoted via sponsorship of the likes of cyclist Sir Chris Hoy and tennis player Andy Murray.
Montgomery said: “The Highland Spring brand will continue to be the biggest part of the business. We expect a 60/40 split between our brands and own-brand.”
He committed to retaining the existing staff and bottling plants. The company started a hiring drive two months ago after trimming costs over the last couple of years.
Montgomery said some staff might work between the company’s plants.
But he denied that Highland Spring was buying into a shrinking market which has been assailed by the economic downturn and concerns about its environmental impact.
“There has been two years’ worth of a declining market. The market is back in growth this year which is a bit to do with the weather, a bit to do with the booming economy and a lot to do with people’s realisation they want to be hydrated and they want the best form of hydration.”
He pointed to predictions from consultancy Zenith that the bottled water market will grow by 3.8% this year.
Montgomery has set Highland Spring the target of becoming a £100m turnover business, up from an estimated £54m for 2009.
Highland Spring has an 8.6% share of the UK market, which accounts for 95% of its sales.
Montgomery said the company is prepared to make more purchases.
Highland Spring, which first approached Greencore earlier this year, bought Speyside Glenlivet Water Company out of administration in March. In 2001, it acquired The Gleneagles Spring Water Company in Blackford.
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