AMPG is one of the UK's key suppliers of retailer brand soft tissue with a 13% share of the £1 billion UK market covering bathroom tissue, household towels and facial tissue.

The acquisition will result in SCA's combined market share in the British consumer sector doubling to 26% and is a continuation of SCA's strategic growth plan for Europe, which is aimed at the Group becoming a leading supplier of brand-name products as well as retailer brand products. SCA is probably best known within the UK for its Velvet and Double Velvet toilet tissue, Wipe & Clean paper towels and its Bodyform feminine hygiene products.

AMPG hit the news late in 1997 with the announcement of a £145 million refinancing package with HSBC Private Equity. The package enabled AMPG to double its existing capacity with new plant and machinery together with the commissioning of a new £30 million mill which produces TAD (Through-Air-Dry) tissue.

Steve Sealey, AMPG's Chief Executive, who together with the rest of the management team will be carrying on in their current roles said: "Since the refinancing of the company, AM Paper Group (AMPG) has proved to be one of the most successful companies in the North West and the fastest growing company in the soft tissue industry."

Products has seen our market share increase dramatically to 13% of the total soft tissue market. This rapid growth in market share and AMPG's strong management have been major factors in SCA's decision to acquire the company."

Sealey added that in his personal opinion the acquisition can only be good for AMPG's workforce as the company moves forward as part of SCA.

AMPG employs over 600 staff at its Skelmersdale, Chesterfield and Haydock facilities and was established in 1983. 

After the acquisition, SCA's market share in the retailer brand sector will be 30%. AMPG's production is based on both TAD and conventional technology and has facilities to produce over 60,000 tonnes annually of which 30,000 tonnes is via TAD technology. Converting capacity totals 100,000 tonnes per year.

SCA say it will be possible to smoothly integrate the acquired operations into SCA's British operations. For example, AMPG's large converting operation can be used to convert bulk rolls from SCA's plant in Prudhoe, where the opposite situation exists with regard to tissue production and converting capacity.

In addition, as a result of the merger SCA can strongly establish a position in the retailer brand market and reach a market share of around 30% at the same time as trademark products maintain momentum due to the newly acquired converting capacity.

Phil Goodwin of HSBC Private Equity in Manchester said HSBC together with Alan Murphy (founder of AMPG), Steve Sealey (AMPG's Chief Executive) and the management had made a very good, profitable return on their investment. "We are delighted to sell the business to a responsible long term owner who is very keen to develop the business further," he added.

HSBC Private Equity became involved with AMPG in November 1997 when it led the £145 million refinancing, including £30 million for the new TAD Mill. A further £15 million was provided for the acquisition of Pennington Paper Products Ltd in October 1998.

Goodwin commented: "AMPG is a tremendous success story and it has been great to be a part of it. Our investment, which has been one of the largest in the North West, is a testament to the role that private equity has to play in developing private companies to their full potential."

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