Listed Cheshire-based bathroom specialist Norcros has announced it is to acquire a shower enclosure manufacturer in a £60m deal.
The supplier of branded showers, taps, bathroom accessories, tiles and adhesives, says it will part fund the takeover of Merlyn Industries through a share placing, raising £31.4m, with the remainder funded from the group’s new £120m debt facility.
Norcros said the transaction with Merlyn, which reported revenues of £30.7m and operating profit of £6.4m in the year to March 2017, was "strategically and financially compelling” and consistent with its strategy to enhance its bathroom product portfolio.
The acquisition expected to be earnings enhancing in the first full year of ownership, and return on investment is expected to exceed Norcros’ cost of capital.
In June, Norcross, which announced the loss of 90 jobs as part of a major restructure earlier this year, reported that pre-tax profits had risen 12.3% to £22.9m.
Year-end figures to March 31 for the Wilmslow company also showed revenue had risen 15% to £271.2m from £235.9m.
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