The Acquisition
Navigator Paper UK Ltd, a subsidiary of a large Portuguese paper company, is set to acquire Accrol Group, a leading independent tissue manufacturer based in Lancashire, UK. The deal, valued at £127.5 million, has been recommended to shareholders. Accrol Group, established in 1993 by the Hussain family in Accrington, has since become a significant player in the UK tissue market. The company relocated to Blackburn in 1996 and expanded further with a purpose-built facility in 2004.
The Offer
Navigator Paper UK Ltd has proposed an offer of 38 pence per share to acquire Accrol Group. This acquisition is expected to be beneficial for both parties, with Navigator Group aiming to bolster its market position and Accrol Group seeking to improve its margins. The deal comes as Accrol’s share price has been relatively low since 2018, making it an opportune time for acquisition.
Strategic Benefits
Accrol’s board has recommended the acquisition, citing the potential for improved margins and strategic alignment with Navigator Group’s long-term objectives. Navigator’s extensive experience in operating similar operations is expected to enhance Accrol’s manufacturing capabilities and market reach. Additionally, the merger is anticipated to result in a turnover of approximately £500 million, with the UK market contributing around 50% of Navigator’s total tissue turnover.
Outlook
Gareth Jenkins, Chief Executive of Accrol, expressed confidence in the merger, highlighting the complementary product offerings and the potential for synergies between the two entities. He emphasised the strategic progress made by Accrol in recent years and expressed optimism about leveraging Navigator’s resources and network to further enhance the company’s position in the market.
Q&A Section
Q1: What prompted the acquisition of Accrol Group by Navigator Paper UK Ltd?
A1: The acquisition was driven by Navigator Group’s strategic objectives to expand its market presence and leverage synergies in the tissue manufacturing sector.
Q2: How will the acquisition benefit Accrol Group?
A2: Accrol Group expects to benefit from Navigator’s expertise, resources, and scale, which will enhance its manufacturing capabilities, improve margins, and strengthen its market position.
Q3: What are the anticipated outcomes of the merger?
A3: The merger is expected to result in increased turnover, with Accrol contributing significantly to Navigator’s tissue turnover. Moreover, it is anticipated to lead to operational efficiencies and strategic growth opportunities for both companies.
