Manufacturer makes £60m Irish acquisition
Listed Cheshire-based bathroom specialist Norcros has announced it is to acquire a shower enclosure manufacturer in a £60m deal.
The supplier of branded showers, taps, bathroom accessories, tiles and adhesives, says it will part fund the takeover of Merlyn Industries through a share placing, raising £31.4m, with the remainder funded from the group’s new £120m debt facility.
Norcros said the transaction with Merlyn, which reported revenues of £30.7m and operating profit of £6.4m in the year to March 2017, was “strategically and financially compelling” and consistent with its strategy to enhance its bathroom product portfolio.
The acquisition expected to be earnings enhancing in the first full year of ownership, and return on investment is expected to exceed Norcros’ cost of capital.
In June, Norcros, which announced the loss of 90 jobs as part of a major restructure earlier this year, reported that pre-tax profits had risen 12.3% to £22.9m.
Year-end figures to March 31 for the Wilmslow company also showed revenue had risen 15% to £271.2m from £235.9m.
Nick Kelsall, group chief executive, said: “The acquisition of Merlyn with its premium brands and market leading positions is an exciting addition to the group, substantially broadening our bathroom product offering. Merlyn’s focus on design, new product development and its standard of customer service will significantly enhance the group’s portfolio. I look forward to working with Charlie and his team, whose experience and enthusiasm for the business has impressed greatly, as we look to grow and develop the Merlyn business further.”
Michael Hoyne, the founder and majority shareholder in Merlyn, added: “I have admired what Nick and his team have achieved at Norcros, growing the business both organically and through its acquisition strategy. I am sure that Charlie and the team will embrace the opportunities that being part of the enlarged Norcros family with its range of channels, products and international breadth will bring, as they look to drive the Merlyn business on to the next level.”
Lead corporate financial adviser to Norcros was Peter Terry, head of North West corporate finance at Grant Thornton. Addleshaw Goddard provided legal advice to Norcros, with the team led by partner Roger Hart.
Addleshaw Goddard also advised Norcros.
The 50 person AG team was led by partner Roger Hart and included George Danczak, Jamie Partridge, Katie Parker, David Auty, Azhar Khan, Kim Meadowcroft, Richard Oman, Caroline Gray, Charlotte Fallon and Kate McGough.
