Plastics group expands with £3m acquisition
Plastics manufacturing group, Coral Products, has announced the £3m acquisition of Haydock-based Film & Foil Solutions.
The Wythenshawe-based plastics group, which makes items such as tote bags and food and gardening recyling bins, bought the business from two private individuals.
The deal includes the payment of £1,348,760 in cash on completion, subject to any adjustment on preparation of completion accounts
A further £750,000 will be satisfied through the issue of shares in the company at the mid-market price on April 29, 2022 of 15.5p, a further cash payment of £566,240, to be held in escrow against a contract dispute, and released to the vendors on a pound for pound basis on settlement, and £335,000 further cash payment to be held in escrow against an insurance claim submitted by F&F which is to be released to the vendors on a pound for pound basis provided that a minimum settlement amount from such claim is achieved.
The cash consideration for the acquisition is being satisfied from the group’s existing resources.
Film & Foil is a converter and supplier of flexible packaging film, print lamination film and speciality plastics, paper and aluminium foils owned and controlled by Ian Hillman and Brian Farrell.
The F&F team will remain as employees of the group, and the company may appoint one of the current F&F team to the board in due course.
Coral Products executive chairman, Joe Grimmond, said: “This acquisition reinforces our focus on niche, specialist operators in the plastics sector.
“F&F brings to the group another range of skills and market opportunities. The company struggled following a fire in their manufacturing facility in 2019, but the directors believe that with this transaction, the F&F management team can once again concentrate their efforts in growing the business.”
He added: “The board anticipates that the acquisition will be earnings enhancing in its first year.”
Unaudited statements for the year ended December 31, 2020, showed that F&F reported net assets of £3.37m, sales of £10.1m, and profit before tax of £61,000.
For the full year ended December 31, 2021, F&F is forecasting a loss before tax of £174,000 but an underlying profit of £541,000, after one-off adjustments.