LONDON, UK: Norcros Plc, a market leading supplier of high quality and innovative bathroom and kitchen products, has conditionally agreed to acquire Granfit Westfield for an enterprise value of £80 million with an additional potential earnout of up to £12 million based on certain performance criteria.
Grant Westfield is a market leading designer, manufacturer and supplier of waterproof bathroom wall panels in the UK.
The acquisition is expected to be double digit earnings enhancing in the first full financial year post completion of the transaction.
The acquisition will be funded from the Company’s debt facilities and the proceeds of a proposed placing of new ordinary shares in the company, to raise approximately £18 million.
The placing will partially fund the acquisition and also ensure that the Group maintains a strong balance sheet to continue to pursue its organic and acquisitive growth strategy.
The placing is being conducted through an accelerated bookbuilding process. Numis Securities Limited is acting as sole bookrunner in connection with the Placing.
Norcros Plc and Numis have entered into a sponsor and placing agreement with respect to the Placing and the Acquisition.
The acquisition is consistent with Norcros’ strategy to expand its bathroom product offer:
- Complementary to the Group’s existing portfolio of products and brands, represents a rare opportunity to add a growing, market leading, profitable, UK focused and well positioned business to its existing portfolio
- Broadens the Group product portfolio towards the aim of providing a ‘one stop shop’ for bathrooms across Norcros’ existing distribution channels
- Increased capability to leverage the Group’s products into new housing and modular markets
- Ability to leverage Norcros’ expertise to drive operational efficiency gains
The UK bathroom and shower panel market is a growing segment of the broader UK bathroom wall coverings market, which the Board believes represented approximately 30 per cent. of the estimated £330 million market in 2021.
Grant Westfield has a market share of approximately 12 per cent of the UK bathroom wall coverings market and approximately 40 per cent of the UK bathroom shower and panel market. Continued growth in domestic bathroom expenditure and new house building spend expected to remain robust.
Commenting on the acquisition, Nick Kelsall, Chief Executive Officer, said: ‘The acquisition of Grant Westfield with its premium Multipanel brand and market leading position is a strategically compelling addition to the Group, broadening our bathroom product offer. Grant Westfield’s focus on design, new product development and its standard of customer service will significantly enhance the Group’s portfolio. I am looking forward to working with the Grant Westfield Managing Director, Sarah Law, and her team as we work together on the next phase of growth.’
Also commenting on the acquisition, Sarah Law, Managing Director of Grant Westfield, said: ‘We are excited to be joining the Norcros family. There are clear opportunities to grow together and, as a leader in the waterproof panel market, our Multipanel brand will be very much at home with their existing bathroom brands. This represents an exciting opportunity to accelerate our successful strategic growth plan in the UK and internationally through new products and market penetration.’