Paper tissue firm to float on AIM

Dan Wright, executive chairman of Accrol

A FAST-growing Lancashire toilet roll company is set to float on the AIM with a valuation expected to be about £100m.

Accrol Papers employs more than 520 workers at its 350,000sq ft Blackburn factory, 100 of those arriving in the last 12 months following a £66m investment from Manchester-based private equity firm NorthEdge.

Dealings are expected to begin on the AIM on June 10. Zeus Capital is acting as nominated adviser and sole broker to the company.

The company, which produces brands including Softie, Triple Softie, Mega and Handy, reported revenue surging 14% to top £100m in a full 12 months for the first time a year ago.
 
The period covered ran from May 1 2014 to April 30 2015, up from £87.6m in the previous year.

The company, launched in 1993, currently manufactures about 16 million units and has a 35% of the discount market and 7% of the overall UK tissue market.

It says it has committed about £18.2m of capital expenditure in the last three years and has recently bought two additional (paper) converting lines, with 25,000 tonnes per annum capacity, taking total capacity to about 143,000 tonnes per annum.

Outgoing chief executive Majid Hussain, one of the family which founded the business, is exiting the company.
 
He said: “My father, Jawid Hussain, started this business in 1993 and the family has built it into the successful Company it is today.

“NorthEdge’s investment in 2014 provided the business with the funding to expand its offering and operations further and we believe that now is the right time for the business to IPO to provide a platform to support further contract wins with new customers.”

The Hussains will remain company shareholders and are undergoing a transitioned exit from the management of the business.

The new management team will include chief executive Steve Crossley, who has more than 30 years’ experience in UK food manufacturing and distribution at senior management or board level, including at Unigate and Northern Foods, along with Joanne Lake and Steve Hammett as non-executive directors.

The existing Accrol board also includes executive chairman Peter Cheung and chief financial officer James Flude, both of whom were introduced by NorthEdge and have been in position for more than a year.

Cheung said: “We are delighted by the level of interest and support we have received from high quality institutional investors. We are a very well invested company with an attractive and progressive dividend policy and we look forward to creating value for all of our shareholders in this new and exciting stage in Accrol’s development.”

Dan Wright, chief operating officer and head of portfolio at NorthEdge Capital, said: “Accrol has enjoyed sustained growth during the two years we have been working with the business.

“The drive and passion of the management team to develop the business has been exemplary. A prospective IPO is an opportunity for the team to further build on a robust platform for growth.”

Addleshaw Goddard’s Manchester Corporate team is advising Accrol.

The AG team is being led by Corporate partner Roger Hart and includes managing associate Jamie Partridge and associates Ed Hamilton and Rachael Norris.

 

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