Navigator increases the price of the public offer for acquisition of Accrol shares in the United Kingdom: Gazeta Rural

On March 22, 2024, the Boards of Directors of Navigator Paper UK Limited (“Navigator UK”), an indirect subsidiary 100% owned by The Navigator Company, and Accrol Group Holdings plc (“Accrol”) announced the terms of an offer recommended by Navigator UK for the acquisition in cash of the entire issued and to be issued share capital of Accrol, a UK-based tissue paper processing company (the “Offer”). Navigator today announced the terms of a recommended increase and final cash offer by Navigator UK for the entire issued and to be issued share capital of Accrol (the “Increased and Final Offer”). Under the terms of the Increased and Final Offer, Accrol Shareholders will be entitled to receive, for each Accrol Share, £0.39 in cash (the “Augmented Offer Price”).

The capitalized terms used in this announcement (“Announcement”) will, unless otherwise defined, have the same meanings as those set out in the shareholder circular relating to the Offer that was published and made available to Accrol Shareholders on April 17, 2024.

The Enhanced Offer price values ​​Accrol’s issued and unissued equity capital at approximately £130.8 million and results in an Enterprise Value of approximately £188.2 million.

The Augmented Offer represents a premium of approximately:

• +14.7% compared to £0.34 (GBX), i.e. the closing price of Accrol shares on March 21, 2024, the last trading day immediately preceding the announcement of the Offer;
• +32.1% compared to the volume-weighted average trading price of Accrol shares in the six-month period up to the last trading day immediately preceding the announcement of the Offer;
• +26.4% compared to the volume-weighted average trading price of Accrol shares in the twelve-month period up to the last trading day immediately preceding the announcement of the Offer (21 March).

Navigator considers the financial terms of the Enhanced and Final Offer to be fair. To this extent, Navigator confirms that the financial terms of the Increased and Final Offer are final and will not be increased, reserving the right to review the Final Offer Price and/or otherwise improve the terms of the Final Offer (i) if there is an announcement on or after the date of this Announcement of a possible offer or of a firm intention to make an offer to Accrol by any third party, or (ii) if, on the other hand, the Takeover Panel gives its consent.

Accrol’s Board of Directors has confirmed that, from the date on which Navigator announced its firm intention to make the Offer (on March 22, 2024) until the date of this announcement, no proposals have been received with respect to a offer to acquire all of the issued, and to be issued, ordinary share capital of Accrol by any third party

Accrol is a processor and supplier of toilet paper, kitchen rolls, facial tissues and wet wipes to major retail chains.

In the financial year ending April 30, 2023, Accrol recorded revenues of £242 million, an Adjusted EBITDA of £15.6 million and had Net Debt of £26.8 million.

Navigator Paper UK Limited is an indirect wholly owned subsidiary of The Navigator Company, SA. Navigator is an integrated producer of pulp, paper, tissue, packaging and energy from biomass, listed on the Euronext Lisbon Stock Exchange, with a market capitalization of approximately €2.75 billion on March 21, 2024 (the last practicable date before announcement of the Offer). In the year ended December 31, 2023, Navigator recorded consolidated revenues of €1,953 million and a consolidated EBITDA of €502 million.

The Navigator Company is the European leader (excluding Russia) and ranks 7th worldwide in terms of production capacity for fine printing and writing paper (Uncoated Woodfree Paper “UWF”), processing more than 1.6 million tons of paper per year. Furthermore, it is the largest European producer of eucalyptus pulp (BEKP), with a production of around 1.6 million tons per year, and the largest producer and forestry manager of eucalyptus in Portugal, with around 100,000 hectares of forest under its management.

• In 2014, Navigator made the strategic decision to enter the tissue market, based on a business model that comprises: (i) the production of tissue paper reels on a large industrial scale, with direct integration of pulp into tissue production; (ii) conversion facilities located in Navigator’s main consumer markets in Western Europe and the United Kingdom; and (iii) the provision of services to the “At Home” and “Away from Home” customer segments. In 2015, it acquired AMS Star Paper, which currently has the capacity to produce around 60,000 tons per year of high-quality tissue paper and corresponding conversion capacity.
• In 2018, it invested in a large tissue paper production unit, in its industrial complex located in Aveiro, which it integrated with its pulp factory, a unit that currently has a tissue paper production capacity of 70,000 tons per year and 55,000 tons of conversion capacity.
• In 2023, it acquired the tissue consumption activity of the Spanish group Gomà-Camps, as well as its industrial unit located in the Zaragoza region, which has a tissue paper production capacity of 35,000 tons and 55,000 tons of tissue conversion capacity .

The Navigator Company now has a total production capacity of 165,000 tonnes of tissue paper and 180,000 tonnes of tissue converting capacity per year, generating approximately €293 million in annual revenue in 2023.

Navigator considers Accrol to be a fundamental pillar in its strategy of sustained expansion of its tissue business in the Western European market.

Navigator’s strategy is a long-term value creation strategy:

• The company will focus on strengthening Accrol’s market position as a trusted benchmark player in the UK tissue paper private label market and supporting its growth across all of its key product segments.
• Believes that Accrol can benefit from Navigator’s expertise and experience in operating similar tissue operations, helping to increase efficiency and productivity, as well as Navigator’s additional paper capacity and access to capital, which they provide the ability to support future growth.
• The integration of Accrol’s industrial units, human resources and commercial relationships with customers into the Navigator Group has the potential to improve its performance for the benefit of customers, employees and shareholders.

The proposed acquisition of Accrol will reinforce Navigator’s positioning in the Western European tissue market. Navigator expects this acquisition to result in a consolidated turnover of around £500 million, with the UK market expected to contribute around 50% of Navigator’s total tissue turnover.