Accrol Group has completed the £41.8m acquisition of Leicester Tissue Company (LTC), in a deal led by Zeus Capital.
Zeus Capital acted as Nominated Adviser and Joint Bookrunner on the transaction, which included an oversubscribed placing and open offer of c. £45m.
Accrol Group, based in Lancashire, is a leading tissue converter and supplier of toilet tissues, kitchen rolls and facial tissues, as well as other tissue products, to major discounters and grocery retailers throughout the UK.
Founded in 2014, LTC is a fast growing, independent tissue conversion business, supplying private label and branded toilet roll and kitchen towel to UK customers, including major supermarket multiples and value retailers.
LTC has delivered a revenue compound annual growth rate of c.70 per cent. between FY17 and FY19. In the unaudited year ended 30 September 2020, LTC generated revenues of £28.0m and adjusted EBITDA of £4.5m.
The acquisition will increase Accrol’s share of the total UK retail tissue market to approximately 16 per cent of the £1.7bn UK industry and consolidate its position in the private label retail tissue market.
Members of the Zeus Capital team included head of PLC advisory Dan Bate, head of corporate broking Dominic King, Jordan Warburton and Kieran Russell, director and associate director of corporate finance respectively. Since 2013, Zeus Capital has acted on over 160 transactions valued in excess of £9.8bn.
Gareth Jenkins, Chief Executive Officer of Accrol Group, said: “The Zeus Capital team has been fantastic to work with in delivering our first acquisition and oversubscribed placing and open offer.
“The acquisition of LTC is fully aligned with our “Brand Killers” growth strategy, adds significant capacity to our existing business and is a major step change that will enable the enlarged organisation to continue to grow ahead of the market.
“We look forward to demonstrating the significant benefits the acquisition will have for the Accrol group.”
Dan Bate, Head of PLC Advisory at Zeus Capital, said: “The fact that both the placing and the open offer were significantly oversubscribed highlights that investors recognise the outstanding job that the Accrol management team has done in restructuring the business, despite ongoing economic uncertainties. The enlarged group now has a huge opportunity to maximise growth over the coming months, and we look forward to supporting Gareth, Dan Wright and the rest of the management team in the next phase.”
Accrol was advised by a national, multi-disciplinary Deloitte team led by the Manchester Advisory Corporate Finance team (Andy Westbrook, Ben Wood and Jarek Steadman) with support from the Equity Capital Markets (Chris Nicholls and Craig Lukins) and Transaction Services teams (Jodi Birkett, Anika Keys and Steven Ringrose).
