Bidvest to acquire washroom hygiene products firm Citron

Industrial conglomerate Bidvest has entered into an agreement to acquire 100% of Citron Hygiene from Birch Hill Equity Partners and other investors, for an undisclosed amount.

Citron provides washroom hygiene products and services in the US, Canada and UK. The service offering includes a comprehensive range of commercial washroom hygiene solutions, contracted menstrual hygiene products, consumables and equipment, Bidvest said in a statement on Wednesday.

Citron, headquartered in Toronto, Canada, was founded in 1974 and serves about 50,000 customer locations from seven branches in Canada, four in the US and 10 in the UK.

About 90% of revenue is recurring and the customer base spans manufacturing, hospitality, facilities management, education, commercial and healthcare.

The Canadian branch network covers all major cities while, in the US, the network is concentrated in the northeast and covers five of the 30 most populous cities.

Bidvest said the total addressable market in Citron’s North American territories was exponentially bigger than Citron’s current revenue.

The acquisition aligns with Bidvest’s strategy of expanding its international presence in hygiene services, facilities management and the distribution of plumbing and related products.

This acquisition meets Bidvest’s growth criteria. Citron is a meaningful player in the territory and enjoys a leading hygiene market position in Canada and in the states of the US in which it operates. It also has a competent management team and senior management has extensive experience in operating service businesses. In addition, revenue visibility is underpinned by the combination of essential services and long average client tenure and Citron has strong growth prospects, Bidvest said.

Bidvest said there are also attractive, sustainable returns and strong cash conversion opportunities.

“Bidvest is of the view that Citron’s service offering and geographic presence will be complementary to Bidvest’s Services International division,” it said. “Several best practices can be shared, and infrastructure leveraged, thereby improving and deepening the overall service offering.”

Bidvest will fully fund the acquisition through its variable rate revolving credit facility.

The effective date of the acquisition, pending the conclusion of conditions precedent, is expected to be towards the end of the 2024 calendar year.

The acquisition is subject to UK Competition and Markets Authority’s approval, with the decision expected within five months of submission, Bidvest said.

MackenzieJ@arena.africa