Accrol agrees to increased £131m takeover offer

The board of Blackburn-based toilet roll and tissue maker Accrol Group said it has agreed to an increased “and final” offer to be acquired by Portugal-based Navigator Paper for £130.8 million in cash.

The increased 39p per share offer represents a premium of 14.7 % to Accrol closing price of 34p per share on March 21, 2024, the last business day before the commencement of the offer period.

The Accrol directors, who have been so advised by Stifel as to the financial terms of the increased and final offer, consider the terms of the increased and final offer to be fair and reasonable …” said Accrol.

“Accordingly, the Accrol directors recommend unanimously that scheme shareholders vote in favour (or procure votes in favour) of the scheme at the court meeting and that Accrol shareholders vote in favour (or procure votes in favour) of the resolution to be proposed at the general meeting …”

Accrol CEO Gareth Jenkins said: “The increased and final offer represents a multiple of approximately 12.1x against Accrol’s FY2023A adjusted EBITDA and 10.0x against Accrol’s LTM adjusted EBITDA for the period ended 31 October 2023 and a premium of approximately 52 per cent. against the average EV/LTM EBITDA multiple of 6.6x paid for publicly traded companies across private label tissue, private label hygiene and other UK companies that focus on private label products.

“As set out in the scheme document, the Accrol board believes that the supply dynamics in the UK are set to change in the coming years with circa. 500k tonnes of integrated capacity entering the UK market making the UK market significantly more competitive.

“The Accrol board believes that the increased and final offer and being part of a vertically integrated group invested into pulp and tissue manufacturing capacity represents significant value for shareholders against a back drop of increasing pulp and tissue prices and a very different and challenging future environment.