Blackburn-based Accrol targets growth with AIM listing

North West tissue manufacturer Accrol Group Holdings plc has today (May 26) revealed its intention to float on the London Stock Exchange’s AIM market.

The business currently commands a 35% share of the discount tissue market and around 7% of the UK’s overall tissue market, manufacturing products for various retailers and service providers at its 350,000 sq ft facility in Blackburn.

Accrol is currently backed by private equity firm NorthEdge Capital, which has supported the business since July 2014 when it backed a management buyout deal worth £66m. The AIM IPO will represent a partial exit for Manchester-based NorthEdge, which will retain a minority stake in Accrol.

The company has experienced rapid growth over the last three years, with sales passing the £100m mark in 2015 and EBITDA showing year-on-year growth of 13.7%. As a result, the firm’s headcount has grown to more than 450.

Accrol has also worked on expanding its Blackburn operations, committing around £18.2m in capital expenditure since 2013 and recently acquiring two new converting lines to bring its total capacity to 143k tonnes as year.

NorthEdge Capital’s COO and head of portfolio, Dan Wright, said: “Accrol has enjoyed sustained growth during the two years we have been working with the business.

“The drive and passion of the management team to develop the business has been exemplary. A prospective IPO is an opportunity for the team to further build on a robust platform for growth.”

Following its AIM listing, Accrol will seek to enhance its operations and target further organic growth within the discount market, in addition to boosting its market share with retailers by placing a renewed focus on customer service and expanding its product set.

Peter Cheung, Accrol chairman, commented: “We are delighted by the level of interest and support we have received from high quality institutional investors.

“We are a very well invested company with an attractive and progressive dividend policy and we look forward to creating value for all of our shareholders in this new and exciting stage in Accrol’s development.”

Accrol was founded in 1993 by Jawid Hussain, the father of outgoing CEO Majid Hussain, who said he believes the company has chosen the right time to list on the AIM market.

He continued: “NorthEdge’s investment in 2014 provided the business with the funding to expand its offering and operations further and we believe that now is the right time for the business to IPO to provide a platform to support further contract wins with new customers.”

Following the deal, for which investment banking firm Zeus Capital served as a nominated advisor for Accrol, the Hussain family will remain company shareholders.