Accrol poised for £127.5m takeover

By Tim Aldred

22 Mar 2024

Gareth Jenkins Accrol

A bid to buy Blackburn-based tissue manufacturer Accrol has been made by a major European player in the sector.

The board of the AIM-listed group has recommended approval of the £127.5m offer by Navigator Paper.

The potential buyer is part of The Navigator Company SA, which is listed on the Euronext Lisbon Stock Exchange. The acquisition would create a business with £500m annual revenues.

The move follows just two months after the sale of Star Tissue, also of Blackburn, to a German-headquartered hygiene group.

Gareth Jenkins, chief executive officer of Accrol, said: "Accrol has undergone a period of significant transformation and growth over the last four years, investing in fully automating its tissue converting operations to enhance manufacturing capabilities. I am proud and grateful to the efforts and commitment of our people.

"We have grown to become a leading manufacturer of private label, own branded and licensed tissue products to the UK market. Combining with the Navigator Group brings together a highly complementary product offering. It will enable Accrol to benefit from the capabilities, scale, network and resources of Navigator, building on the strategic progress we have made to date."

Accrol manufactures toilet tissues, kitchen rolls, facial tissues and wet wipes. Between 2017 and 2019, the company endured various setbacks including profit warnings, job losses, the temporary suspension of its shares on AIM and an FCA investigation.

However, with new senior appointments in place, the company has since enjoyed a successful turnaround, marked by strong year-on-year growth both organically and on the acquisition trail.

In the year ended 30 April 2023, Accrol posted revenues of £242m, Adjusted EBITDA (as defined in Accrol’s 2023 annual report) of £15.6m and Net Debt (pre-IFRS16 standard) of £26.8m.

For the half-year ending October 31st, 2023, Accrol had revenues of £100.3m and Adjusted EBITDA of £10.2m. This reaffirmed the Accrol Board’s forecast annual revenues of £205m and Adjusted EBITDA of at least £21m.

Navigator is a large Portuguese integrated pulp, paper, tissue, packaging and biomass-based energy company, listed with a market capitalisation of approximately €2.75bn.

In the financial year ended 31 December 2023 Navigator reported consolidated revenues of €1,953m and consolidated EBITDA of €502m.

The Navigator Company is ranked seventh worldwide in capacity of production of fine printing and writing paper, processing more than 1.6 million tonnes of paper per year. It moved into the tissue market in 2014, and expects Accrol to account for around 50 per cent of Navigator’s total tissue turnover.

António Redondo, chief executive officer of Navigator, said: "The prospective acquisition of Accrol, a renowned tissue manufacturer based in the UK, marks a pivotal moment for Navigator, as we expand our commercial footprint to the UK tissue market.

"Accrol brings an outstanding business franchise, including an exceptional customer base, highly skilled employees, and a solid track record of producing quality tissue products. We are excited to integrate Accrol assets, competences, and talented team into our organization, aiming at solidifying our position as a reference player in the UK tissue industry and establishing our presence in the UK market over the long term."

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