Manchester firm announces £12.5m sale of personal care liquids business
Middleton-based McBride announced the sale of its European personal care liquids business to Royal Sanders Group today for £12.5m in cash.
The Greater Manchester business manufactures and supplies co-manufactured and private label products for the household and personal care market.
It operates manufacturing sites in Manchester, Barrow, Hull and Bradford.
Proceeds from the sale will be used to pay down group net debt and settle transaction costs.
In its half year results of February 22, 2018, McBride announced plans to launch an accelerated transformation programme to return its personal care and aerosols (PCA) division to break even within 18 months.
Since February, the group has announced proposals to close it UK aerosols operations at Hull.
As a result of this action and the absorption of certain volumes into the group’s French aerosols operation, it expects its ongoing aerosols operation to be at break-even profitability levels by July 2019.
As the next step in the PCA transformation programme, the group today announces that it has agreed terms with Preston-based Royal Sanders for the disposal of its European personal care liquids activities, which comprises two manufacturing sites at Bradford, and Ieper in Belgium, which supply customers with a range of personal hygiene, haircare and oral care products.
The proposed deal will comprise the disposal of the trade and assets of the European personal care liquids business for £12.5m, payable on completion.
In the 12 months to June 2017 the business generated revenues of £58.8m and an EBITA loss of £1.9m.
Gross assets at December 31, 2017 were £19.8m.
For the 12 months to June 30, 2018, the business is expected to generate revenues of £56m and an EBITA loss of £2.8m.
The transaction is expected to complete during the last quarter of 2018.
McBride chief executive Rik De Vos said today: “The agreement to sell our European personal care liquids activities follows a comprehensive review of the business and marks the final element in the transformation plan for our European PCA activities.
“The transaction enables the business to be developed as part of a dedicated personal care manufacturer of greater scale and positions McBride’s European operations as a focused household business with a clear strategy to deliver sustainable profitable growth.”
Paul Mann, Jonathan Ross, Bart Vanderstraete, Alison Treliving and Hannah Crosland from law firm Squire Patton Boggs advised McBride, as did a team from Deloitte, comprising Rob Howells, Andy Westbrook and Abi Godfrey.
Hill Dickinson’s Ian Gillis and Harriet Watson advised Royal Sanders.
In a separate trading update covering the 12 months ending June 30, today, the group issued a warning that profits would fall below target.
It said: “Following weaker than expected sales levels in May and June 2018, the group now expects full year adjusted profit before tax to be marginally below the lower end of analyst expectations.”