Nichols, the soft drinks group tipped as a takeover target for AG Barr, said yesterday it has acquired Scottish-based Cariel Soft Drinks for an undisclosed sum. Cariel, which has an annual turnover of £1.7m, sells canned and draught soft drinks such as Sunland and Ben Shaws.

Nichols, the creator of the popular drink Vimto, is a multi-million pound international business, specialising in soft drinks and dispensing systems for pubs and restaurants. Dunblane-based Cariel refused to discuss any details of the sale when contacted by The Herald. However, Nichols' executive chairman, John Nichols, said the deal would safeguard 17 full-time jobs at Cariel and would "double the size" of his company's business in Scotland.

He described the takeover of Cariel, which occupies a key position in the Scottish soft drink dispensing market, as "entirely friendly".

The Nichols company, which has its headquarters in Newton-le-Willows, Merseyside, said Cariel, when combined with its existing Scottish Cabana operation, will cement its position as the third-largest operator in the soft drinks dispensing sector in the UK.

It is buying into a lucrative market in Scotland - the soft drinks market north of the border was worth £629.8m in 2006, up 8.9% on 2005, according to the AC Nielsen research company.

In March, Nichols admitted that it was in negotiations over a possible takeover after newspaper reports suggested it was being stalked by potential bidders, one of which was thought to be AG Barr, the Glasgow-based maker of Irn-Bru and other soft drinks.

Nichols described the talks as "preliminary discussions" regarding the possibility of an offer for the group.

The company, which also makes brands such as Sunkist and Panda, added that discussions were at an early stage, and there was no certainty any offer will be forthcoming.

Nichols has expanded to include holdings in the food and beverage distribution market, notably through its subsidiaries such as Cabana, which supplies soft drink dispensing systems to more than 6000 outlets throughout the United Kingdom; Balmoral, the United Kingdom's leading distributor of coffee and hot beverage dispensing systems; and Nichols International, which manufactures and distributes its own and third-party foods and beverages.

The company also owns Stockpack, a contract packing company providing co-manufacturing and co-packing services to the food and drinks industries. The company's diversification has enabled it to extend its sales to about 60 countries and boost revenues to more than £90m. The Nichols company is led by John Nichols, a grandson of the founder. John Nichols also holds the family's 20% share in the company. Day-to-day operations are led by managing director Gary Unsworth, the first non-Nichols family member to run the company since its founding.

Nichols floated on the London Stock Exchange, before moving to the Alternative Investment Market in 2004. It employs more than 150 people, with partners based all over the world from China to India and the Middle East to South Africa.