Typhoo Tea has been bought out of administration by manufacturer, supplier and brand owner of fast-moving consumer goods, Supreme, for £10.2m.

The news comes after the pre-packaged tea brand, which has been in business for 120 years, entered administration on Friday.

The deal includes Typhoo’s stock and trade debtors with a book value of £7.5m.

Although the firm reported a revenue of around £20m in the year to 30 September, it also recorded a pre-tax loss of £4.6m.

Head of money and markets at Hargreaves Lansdown, Susannah Streeter added that in recent years, Typhoo, which distributes products to UK supermarkets and discounters, the NHS, the Ministry of Defence and international customers across North America, EMEA and south east Asia , had reported "falling sales" and "production issues" at its plant on Merseyside, which led to it entering administration.

Supreme said that the acquisition will "further accelerate” its "broader diversification strategy", which looks to bring non-vape annualised sales to over £120m, which is around 50% of the group’s revenue.

It is also set to broaden the firm’s UK retail network, adding more high-street names such as Holland & Barrett, which it said could generate sales opportunities across multiple Supreme categories and product areas.

Chief executive officer at Supreme, Sandy Chadha, said: "I believe Typhoo Tea will thrive under our ownership, further benefitting from Supreme's significant market reach and successful track record in creating brand loyalty, making us an ideal fit for this business.

"Having established our soft drinks division earlier in the year, we believe the addition of Typhoo Tea and its highly complementary blend of great value and premium tea brands, creates tangible cross sell and product innovation opportunities in the near-term, alongside avenues into credible UK retailers that Supreme has been looking to partner with."

Streeter concluded: "For staff, there will be relief that many jobs will be saved, particularly just before Christmas. However, it’s highly likely that Supreme will want to steam ahead and find efficiencies to cut costs and try and coax the company back to profit. It’s clearly got a bargain brew for Typhoo by buying the brand out of administration.

"It has loyal custom it can build on, but also will spy new opportunities given tea’s wellness image to tie into the ambitions of its supplements and multivitamin arm. There are clearly opportunities ahead to appeal to health-conscious consumers and future Typhoo product launches look likely focus on this trend."

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