Thu, 25 Apr 2024 | MBO/MBI
Johnson Tiles UK, a tile business based in Stoke-on-Trent, has been sold to its existing management team by listed kitchen and bathroom group Norcros Plc. Johnson Tiles UK designs, manufactures and sources ceramic floor and wall tiles.
In its accounts for the year to March 31 2023, the firm reported revenues of £35.3 million, which represented 8 per cent of Norcros group revenue, and operating profits of £500,000. However, Norcros said that the company had "absorbed cash in each of the last three years”.
In October of last year, faced with falling UK demand for tiles, Johnson Tiles’ manufacturing capacity was reduced by 50 per cent. However, following a strategic review, the group has now entered into an agreement to sell the company to its existing management team. The company had initially been acquired by Norcros in 1971, becoming one of its core brands.
The trade and assets of the firm will be transferred to Johnson Tiles Limited, a new company set up by managing director Stephen Dixon and his management team. The management team will pay £1 million for the business, as well as agreeing to a “modest” earnout dependent upon the business’ future equity, becoming due in April 2028.
The disposal is expected to complete during May 2024, following the conclusion of a customary employee consultation period. Following the sale, the company will continue to operate from its Stoke-on-Trent site, which will remain under Norcros Group ownership.
Thomas Willcocks, chief executive of Norcros plc, commented: "In June 2023, we communicated our strategic priorities, namely portfolio development, organic growth, operational excellence and ESG and we will continue to ensure that our capital allocation is aligned accordingly.”
"This sale will allow Norcros to focus on and accelerate the execution of our growth strategy. Johnson Tiles UK has been a long-standing partner of the group and we thank them for their significant contribution.”
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