Navigator Paper UK has increased its tender offer made on 22 March 2024 for UK tissue converter Accrol Group Holdings plc from £0.38 to £0.39 per share.
The increased offer price represents a premium of approximately 14.7 per cent to the closing price of 34.0 pence per Accrol share on 21 March 2024 (the last business day prior to the commencement of the offer period), values Accrol’s entire issued and to be issued share capital at approximately £130.8m and implies an enterprise value of approximately £188.2m.
Navigator considers the financial terms of the new offer to be fair and states that this offer is final and will not be increased unless another announcement of a possible offer by a third party is made or the takeover board otherwise gives its approval. The Board of Directors of Accrol had confirmed that no offers from third parties had been received from 22 March 2024 until the date of the announcement of the increase in the offer, Navigator says.
The planned acquisition of Accrol will strengthen Navigator’s market position in the Western European tissue market, the company added. The company expects total sales of its tissue businesses to increase to approximately £500m with the acquisition of Accrol, with the UK market accounting for approximately 50 per cent of Navigator’s total tissue sales.
Accrol is a leading UK tissue converter and supplier of toilet paper, kitchen rolls, facial tissues and wet wipes for many UK discounters and food retailers. In the financial year ended 30 April 2023, Accrol generated revenue of £242m and adjusted Ebitda of £15.6m.
In 2014, Navigator made the strategic decision to enter the tissue market. In addition to the production of parent rolls on a large industrial scale with direct integration of the pulp into tissue production, the business model also envisages converting plants in Navigator’s core consumer markets of Western Europe and the UK as well as serving the At Home and Away from Home markets.
In 2015, Navigator acquired AMS Star Paper, which currently has a production capacity of around 60,000 tpy of tissue paper per year and corresponding converting capacity. In 2018, Navigator invested in a large-scale tissue paper production facility at its industrial complex in the Aveiro district of Portugal, which was integrated into the pulp mill and now has a tissue paper capacity of 70,000 tpy and 55,000 tpy of converting capacity. In 2023, Navigator took over the tissue consumer business of the Spanish Gomà Camps Group and its industrial site in the Zaragoza region, which has a production capacity of 35,000 tpy of tissue paper and 55,000 tpy of converting capacity.
Navigator’s current capacities in the tissue sector comprise 165,000 tpy of production and 180,000 tpy of processing with a turnover of €293m in 2023.
For Navigator, Accrol is an important pillar in the strategy of sustainable expansion of its tissue business in the Western European market, the company explains. The strategy is focused on long-term value creation and will concentrate on building Accrol’s market position as a trusted reference supplier in the tissue private label market in the UK and supporting growth in all core product segments, the company says.
