4 October 1999
McBRIDE AND NICHOL ESTABLISH JOINT VENTURE AEROSOL COMPANY AND
McBRIDE ACQUIRES NICHOL'S HOUSEHOLD AND PERSONAL CARE LIQUIDS BUSINESS
McBride plc ('McBride') announces that it has exchanged contracts to establish a
joint venture company comprising the Hull-based aerosol activities of its UK
subsidiary, Robert McBride Limited ('RMB'), and the aerosol activities of Nichol
Beauty Products Limited ('Nichol') at Thetford in Norfolk. The joint venture
company will be called Aerosol Products Limited ('Aerosol Products') and will be
owned 50% by RMB and 50% by Nichol. Aerosol Products will manufacture aerosol
products for retailer brand and contract customers, with annual sales expected
to be in excess of £50 million.
The combination of the two businesses will create the largest retailer brand
aerosol manufacturer in the UK operating from a single site. An initial review
indicates that Hull is likely to be the preferred site but full discussion and
consultation with all concerned will take place. RMB's proven strength in
retailer brand and category management combined with the operating strengths and
assets of the two businesses will underpin the future prospects of Aerosol
Products. RMB has entered into an agreement to manage the Aerosol Products'
In order to establish the joint venture RMB will transfer its aerosol business
in return for 50% of the ordinary share capital of Aerosol Products. Nichol will
transfer its aerosol business in return for 50% of Aerosol Products and £10
million in cash. Aerosol Products will fund the acquisition through bank debt.
The Board of McBride currently intends to retain ownership of its interest in
the joint venture.
Put and call arrangements are in place under which RMB will have the right, and
may be required, to acquire the 50% shareholding it does not currently hold
following the second anniversary of Completion. These arrangements are on the
basis of a valuation formula after deducting outstanding debt (including the
The Board of Aerosol Products will comprise an independent chairman Christopher
Honeyborne and representatives of McBride and Nichol. The McBride
representatives will be Mike Handley, Terry Monks and John Budsworth who will
not have service contracts and will not be remunerated by the joint venture.
In the year to 30 June 1999 profits attributable to RMB's aerosol activities
were £0.5 million. Assets employed in RMB's aerosol activities at 30 June 1999
were £5.6 million.
Commenting on the joint venture McBride's chief executive, Mike Handley said:-
'The joint venture will be large enough to develop the retailer brand
penetration levels that are currently lower than the household and
personal care sector averages. The combination of commercial expertise
from McBride and the scale of the operations will create a strong new
force in the market.'
RMB is separately announcing that it has agreed to acquire the household and
personal care liquids business and assets of Nichol for a cash consideration of
£4.25 million. In order to obtain operational benefits, RMB intends to transfer
the activities of the business to its liquid household and personal care
factories in Middleton and Bradford.
In the year to 31 January 1999 Nichol's profits attributable to both its aerosol
and liquids activities were £2.0 million and at 31 January 1999 the net assets
employed in both these activities were £10.9 million.
For further information please contact:
Mike Handley, Chief Executive and Deputy Chairman
Terry Monks, Group Finance Director
McBride plc 01494 607050
Financial Dynamics 0171 831 3113