2 November 2017 – proposed acquisition
Norcros, the market leading supplier of branded showers, taps, bathroom accessories and tiles has announced the proposed acquisition of Merlyn Industries Limited, a market leading designer and distributor of mid to high end branded shower enclosures, screens and trays. The company has a multi-channel sales approach based on distinct brands for each channel. The products are supplied to independent retailers, national and regional merchants, targeted specific contracts such as with hotels or housebuilders and distributors. The acquisition is costing £60m and to help fund this Norcros is raising £31.4m through a placing and open offer of 18.25m shares at 172p each. In the year to 31 March 2017, Merlyn generated revenues of £30.7m and operating profit of £6.4m. The acquisition will enhance the group’s product portfolio adding a number of well-established and market leading brands. The acquisition is also expected to be earnings enhancing in its first full year of ownership. This move is in keeping with the group’s strategy and we maintain our recommendation of BUY.
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