Portuguese Paper group swoops for Accrol
A Portuguese paper manufacturer Navigator is to take over Lancashire-based Accrol Group valuing the business at approximately £127.5 million.
The deal appears to be the culmination of a transformation plan that started when Accrol went public in 2016, growing organically and through three acquisitions since 2020.
But Accrol’s share price has been weak since late 2018, with the significant turnaround in the business not resulting in a sustained recovery.
“As previously announced, Accrol has experienced strong financial and operational performance throughout the recent past, delivering profit upgrades and improving margins but when coupled with broader economic and political uncertainty, the wider AIM market has suffered significant challenges and has as yet not resulted in a strong upward trend of the share price,” the board said.
Accrol is a leading tissue converter and supplier of toilet tissues, kitchen rolls, facial tissues, and wet wipes to many of the UK’s leading discounters and grocery retailers across the UK.
In 2016, Accrol had revenue of circa £118 million and EBITDA of circa £15 million.
In 2024, Accrol is on track to report revenue of circa £205 million and EBITDA of at least £21 million in 2024, driven by “increasing demand, strength of retail relationships, robust supply model and successful strategic integration of three complementary businesses.”
In recommending the offer Accrol’s board said there were strong operational reasons, such as joining a larger integrated group, with paper and pulp making capacity, would allow Accrol to continue to improve and maintain margins and win larger wallet share from the largest UK retailers by being an integrated supplier, benefitting from the capabilities, scale, network and resources of Navigator.
Commenting on the Offer, 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 and have developed broad retail relationships and a robust supply model that enables us to produce great quality and value products.
“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.”
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.
“The proposed acquisition is perfectly aligned with our long-term growth strategy for the tissue business and underscores our unwavering commitment to driving innovation, sustainable growth, and operational excellence at Navigator.
“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.”
The Manchester office of Addleshaw Goddard is advising Accrol on the takeover offer. The AG team is led by partner Roger Hart and includes Paul Keohane, Lucie Walker, Sarah Randall and Eleanor Chatterton.
