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DEALMAKERS
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By Ged Henderson
THE TIDE IS TURNING
Lancashire has seen a trio of multi-million pound deals in the first three months of 2024 with the businesses involved proving tempting targets for growth hungry overseas buyers.
This strong start to the year has dealmakers now believing the M&A tide has begun to turn after what has been a lean period, with the county offering both growth opportunity and value to potential investors.
The latest headline-making deal involves tissue manufacturer Accrol. A bid to buy the Blackburn based group was made by a major European player in the sector at the end of March.
Navigator Paper has now upped its original offer of £127.5m to a final offer of £130.8m. The board of the AIM listed group has recommended approval.
The potential buyer is part of The Navigator Company SA, which is listed on the Euronext Lisbon Stock Exchange. The acquisition would create a business with £500m annual revenues.
Navigator is a large Portuguese integrated pulp, paper, tissue, packaging and biomass- based energy company, listed with a market capitalisation of approximately €2.75bn.
Its move came just two months after the sale of Star Tissue, one of the UK’s leading independent makers of hygiene paper products and also based in Blackburn, to a German headquartered hygiene group.
It is now owned by WEPA Professional, a family run business with a turnover of more than £1bn. No figure was been made public but it is reported to be a multi-million pound deal.
The hat-trick of early year deals saw Accrington based managed transport specialist CMAC Group bought by one of the world’s largest land transport companies.
The word ‘growth’ figures highly in all three transactions. This £80m-plus deal with the Singapore headquartered ComfortDelGro Corporation will “turbo-charge” CMAC’s growth, according to chief executive Peter Slater.
While Star Tissue’s Khalid Saifullah believes its sale to WEPA will act as the catalyst for its spectacular growth.
Gareth Jenkins Accrol’s chief executive Gareth Jenkins believes
its proposed sale will enable it to “benefit from the capabilities, scale, network and resources” of Navigator, “building on the strategic progress we have made to date.”
He says: “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.
“We have grown to become a leading manufacturer of private label, own branded and licensed tissue products to the UK market. Combining with the Navigator Group brings together a highly complementary product offering.”
The Navigator company is ranked seventh worldwide in capacity of production of fine printing and writing paper, processing more than 1.6 million tonnes of paper per year.
It moved into the tissue market in 2014, and expects Accrol to account for around 50 per cent of its total tissue turnover.
As António Redondo, chief executive officer says, the prospective deal aims to expand its commercial footprint to the UK market as it looks to play a long game.
He adds: “Accrol brings an outstanding business franchise, including an exceptional customer base, highly skilled employees, and a solid track record of producing quality tissue products.”
Looking at the bigger dealmaking picture, Ryan Bilsborough, manager in the corporate finance team at Blackburn headquartered accountancy group PM+M, says the expectation of interest rates and inflation
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