UK-based Tissue Converter Accrol Enters into Conditional Agreement to Acquire LTC

Accrol, a UK leading independent tissue converter, has announced that it has entered into a conditional agreement to acquire the entire issued share capital of the LTC Group, a UK-based tissue converter, for an enterprise value of up to £41.8 million, comprising initial consideration of £35.0 million at acquisition completion and up to a further £6.8 million deferred consideration due in 2021, contingent on certain performance criteria being achieved.

Founded in 2014, LTC is a well-invested, 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 is a well-invested business of good scale with high-quality, modern machine assets, comprising four tissue lines, with significant capacity, highly effective systems and a strong day-to-day operational leadership team.
The acquisition will increase Accrol's share of the total UK retail tissue market to approximately 16 per cent. of the £1.7 billion UK industry and consolidate its position in the private label retail tissue market.
With about 48 per cent. of Accrol's sales currently delivered south of Leicester, LTC's central England location provides a significant opportunity for logistical synergies.
LTC's product mix and customers are complementary to and enhance Accrol's existing customer relationships.

Gareth Jenkins, CEO of Accrol, said: "This is a step change for Accrol. LTC adds significant capacity to our existing business, which is already growing ahead of the market, as well as immediately enhancing the earnings of the Group. In addition to bringing a wider customer base, it increases the size and scale of the business, enabling greater cost efficiencies and improved market positioning.”

Accrol is based in Lancashire and is a leading independent tissue converter, producing toilet roll, kitchen roll and facial tissue products for many of the UK's major grocery retailers and many of the large discounters. The business imports parent reels from around the world and converts them into finished goods, employs 395 people and operates from four sites in Lancashire:

LTC, founded in 2014, is an independent supplier of private label toilet tissue and kitchen towel to supermarket multiples and value retailers across the UK. Like Accrol, LTC converts parent reels to toilet tissue and kitchen towels using conversion plant machinery, delivering the finished goods through third party logistics providers.

Core products include a luxury range, and products are sold with either LTC branding or as private label for the retailer to add its own branding. The toilet roll range includes 2- and 3-ply rolls, luxury, super-soft, quilted and fragranced. Own brands comprise Soooo, Quantum and Quilted Softpockets. The kitchen towel range includes 2- and 3-ply and Grime Buster, Splash Buster and Soooo own brands.

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