McBride PLC (LSE:MCB) has secured a long-term strategic manufacturing partnership with Vestacy that is expected to generate annualised revenue of around £170 million at maturity and increase group revenue by approximately 15%.
The household cleaning products manufacturer said the agreement covers contracts lasting between five and eight years and includes the acquisition of two Vestacy manufacturing facilities in Spain and Portugal for nominal consideration.
Vestacy, the global home care company behind brands including Air Wick, Calgon, Cillit Bang and Mortein, will transfer production volumes to McBride across the two Iberian sites as well as existing facilities in Belgium, Italy, Poland, the UK and France.
The majority of the products are currently manufactured by a third-party supplier and are focused on laundry, a strategic growth category for McBride.
Revenue from the arrangements, together with other contracts being signed in parallel, is expected to reach an annualised £170 million during the second half of the year ending June 2028.
Margins are expected to be consistent with McBride's existing group average, with earnings per share growth anticipated to broadly match the revenue increase.
The transaction is structured to limit McBride's upfront capital requirements. Vestacy will fund around £34 million of additional manufacturing equipment over the next two years, while McBride expects to invest about £17 million across transition, project and capital expenditure costs.
Net debt is expected to increase by as much as £25 million at its peak during the second half of the 2028 financial year.
McBride said the partnership would push contract manufacturing revenue beyond the 25% proportion of group sales targeted at its 2024 Capital Markets Day.
Completion of the Iberian factory acquisitions is expected in early 2027, with the expanded production network anticipated to be fully operational in early 2028.
