£116m toilet roll firm floats on AIM
LANCASHIRE toilet roll company Accrol Group Holdings floated on the AIM at 8am today with an enterprise value of £116m and a market capitalisation of £93m.
The move sees NorthEdge Capital, the private equity firm focused on the North of England, achieve its first exit, but retaining a 15.04% stake in the company trading under the stock ticket ACRL:LN.
NorthEdge backed the company from its maiden £225m Fund, taking a 46.25% stake. The transaction is the firm’s first flotation and marks a partial exit for NorthEdge investors in less than two years.
Dan Wright, chief operations officer and partner, and George Potts, investment manager, led the transaction for NorthEdge.
Accrol successfully raised approximately £63.5m by placing 63.5m existing and ordinary shares with investors at a placing price of 100 pence per ordinary share.
Backed by NorthEdge in July 2014, Accrol is a tissue paper convertor based in Blackburn. It currently manufactures around 16 million units per week and supplies some of the UK’s largest retailers including Tesco, Aldi, Morrisons, Bookers and Wilkinsons.
Majid Hussain, the outgoing chief executive of Accrol, said: “Working with the NorthEdge team has not only helped us to increase the value of Accrol, but also enabled us to build a more robust business for the future encouraging us to invest in plant and machinery to increase capacity.
“Not only did the team provide funding for growth, but we also gained strategic leadership as well as a top quality management team.
“The enterprise value has grown from £60m to £116m in under two years and NorthEdge’s support was instrumental in getting the business to this stage.”
Wright said: “It has been a pleasure working with the management team at Accrol. The business has grown to become a dominant player in the market and the IPO will support the Company’s continued expansion plans and demonstrates our ability to deliver two-step exits at enhanced value.
“The public markets remain a viable exit route for a number of our assets and we will continue to partner with founding teams to deliver a two-step exit at an enhanced value.”
Zeus Capital (John Goold, Dan Bate and Jonny Sharp) brokered the transaction. DWF’s Manchester team led by Frank Shephard advised Zues.
KPMG (John Moth, Steve Heath, Louise Warne, Joanne Taylor and Joanne Brien) provided long-form, working capital and tax structuring advice. PwC (Nick Boden) acted as reporting accountants. Rothschild (Tim Morris, Omaier Akhtar and James Wigglesworth) provided corporate finance advice to the shareholders.
Dan Bate, director at Zeus Capital, said: “It is a pleasure to advise Accrol Group Holdings plc on its admission to AIM, £63.5m fundraising and new £38m debt facilities.
“The Hussain family has built up a successful business since it was founded in 1993 and will be stepping back as part of a managed hand over process to the executive team.
“I am confident that with the support of its new institutional investors, Accrol will go from strength to strength as a public company. I am delighted also to have supported NorthEdge on the successful completion of the first exit from its maiden fund.”
Addleshaw Goddard’s Manchester Corporate team has advised Accrol.
The AG team was led by Corporate partner Roger Hart and included managing associate Jamie Partridge and associates Ed Hamilton, Kasim Hussain and Rachael Norris.
This is the third IPO which the Addleshaw Goddard Manchester team has advised on this year.
