LONDON, UK: Navigator Paper UK Limited, a subsidiary of The Navigator Company has agreed to takeover Accrol Group Holdings plc in an all-cash transaction. The transaction is valued at approximately £127.5 million and will be executed via a Court-sanctioned scheme of arrangement, with an alternative Takeover Offer as a reserved option.
Accrol shareholders are set to receive 38 pence per share in cash, marking a significant premium over recent trading prices. This offer represents an 11.8% premium over the closing price of 34.0 pence on March 21, 2024, a 28.7% increase over the six-month volume weighted average price of 29.5 pence, and a 23.2% rise over the twelve-month average of 30.8 pence.
The Navigator Company, S.A. is a large Portuguese integrated pulp, paper, tissue, packaging and biomass-based energy company, listed on the Euronext Lisbon Stock Exchange, with a market capitalisation of approximately €2.73 billion, as at the Latest Practicable Date. In the financial year ended 31 December 2023 Navigator reported consolidated revenues of €1,953 million and consolidated EBITDA of €502 million.
Navigator is the European leader (excluding Russia) and is ranked 7th worldwide for its capacity in the production of fine printing and writing paper (Uncoated Woodfree Paper “UWF”), processing more than 1.6 million tonnes of paper per year. Furthermore, Navigator is Europe’s largest producer of Bleached Eucalyptus Kraft Pulp (“BEKP”) producing circa 1.6 million tonnes per year, and is the largest eucalyptus forest producer and manager in Portugal, with circa 100,000 hectares of forest under management.
In 2014 Navigator made the strategic decision to enter the tissue market. Navigator now has a total production capacity of 165,000 tons of tissue paper and 180,000 tonnes of tissue converting capacity per year generating approximately €293 million of annual revenue in 2023.
Navigator sees Accrol as a key pillar in its strategy of sustained expansion of its tissue business in the Western European market. Accrol has a leading position in the UK consumer private label market segment, holding valuable commercial relationships with relevant tissue clients. The acquisition of Accrol Group will reinforce Navigator’s market position in the Western European tissue market. Navigator anticipates this would result in a consolidated turnover of approximately £500 million, with the UK market expected to contribute around 50 per cent. of Navigator’s total tissue turnover.
António Redondo, Chief Executive Officer of Navigator, said: “The prospective acquisition of Accrol, a renowned tissue manufacturer based in the UK, marks a pivotal moment for Navigator, as we expand our commercial footprint to the UK tissue market.
The proposed acquisition is perfectly aligned with our long-term growth strategy for the tissue business and underscores our unwavering commitment to driving innovation, sustainable growth, and operational excellence at Navigator.
Accrol brings an outstanding business franchise, including an exceptional customer base, highly skilled employees, and a solid track record of producing quality tissue products. We are excited to integrate Accrol assets, competences, and talented team into our organization, aiming at solidifying our position as a reference player in the UK tissue industry and establishing our presence in the UK market over the long term.”
Commenting on the Offer, Gareth Jenkins, Chief Executive Officer of Accrol, said: “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. I am proud and grateful to the efforts and commitment of our people. We have grown to become a leading manufacturer of private label, own branded and licensed tissue products to the UK market and have developed broad retail relationships and a robust supply model that enables us to produce great quality and value products.
Combining with the Navigator Group brings together a highly complementary product offering. It will enable Accrol to benefit from the capabilities, scale, network and resources of Navigator, building on the strategic progress we have made to date.”
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