Accrol Group Holdings plc (LON:ACRL), the UK’s leading independent tissue converter, has announced that the Group has completed the acquisition of Severn Delta Limited, a £5m revenue wet wipe and tumble dryer sheet manufacturer based in Somerset, for an EBITDA multiple of less than 3x before synergies. The acquisition was funded from the Group’s existing cash reserves.
Acquisition rationale
The acquisition of Severn Delta demonstrates the Group’s ambition to broaden into other household products through strategic and complementary acquisitions which strengthen and extend the existing product offering. Severn Delta brings additional capacity and new capabilities to Accrol’s growing wet wipe segment.
Severn Delta currently operates four production lines from its 33,000 sq.ft. facility in Somerset, with three lines manufacturing biodegradable personal care, household, and disinfectant wet wipes, and the other producing tumble dryer sheets.
As a result of the successful acquisition and integration of John Dale in April 2021 and the growth seen in the wet wipes business generally, it is clear the Group can scale the business at pace, utilising Accrol’s existing relationships with UK retailers and grocers, as well as benefit from cross-selling to the new key accounts Severn Delta brings.
Gareth Jenkins, Chief Executive Officer of Accrol Group, said:
“We are pleased to announce the acquisition of Severn Delta and welcome its employees into the Group. Severn Delta enhances our market share in the wet wipe segment and extends our product range, adding further personal care and household wipes. The business currently operates four production lines which we believe can be utilised further to support our customers with their growth and generate a significant return on investment.”
