Zip buys Vestal Water, sees expansion opportunities in HORECA market

Image: www.vestalwater.com

Drinking water appliance company Zip Industries has announced an agreement to purchase Vestal Water, a maker of drinking water systems for the hotels, restaurants and café (HORECA) market.

Zip CEO John Doumani said in a statement that Vestal’s products were gaining in popularity, but their market was underdeveloped, “with only an estimated 4 per cent of outlets using on tap drinking water systems. Our research shows that the future potential is significant given the HORECA market is experiencing particularly strong demand for dispensed drinking water appliances.”

Vestal’s founder Mark Sweet will head Zip’s new HORECA division.

“This acquisition fills a gap in our portfolio and offers an exciting new growth opportunity,” said Doumani.

Last month The Australian Financial Review reported that Zip, which exports to over 70 countries and does over 90 per cent of its manufacturing at Condell Park in western Sydney, is eyeing an ASX float.

According to that article, its systems are in 70 per cent of workplaces, and are seeing increased rates of installation in residential markets.

The company has around 135,000 taps installed in Australia. It began in the 1970s by making under-sink boiling water systems and has made chilled drinking water systems since 1996.

Zip is 80 per cent owned by Quadrant Private Equity with the remaining stock held by the founding Crouch family.