IWP International is at an advanced stage of negotiations to acquire a further British manufacturer and distributor of personal care products, according to informed industry sources.

The company being acquired operates in the English midlands and generates annual sales of some £40 million. The consideration will be around £40 million but the final figure is not expected to be agreed for a couple of months, the sources said.

IWP has been actively looking for acquisitions in household and personal care products businesses for some time. It generated sales of £108 million in this area last year. The latest acquisition, when concluded, will be a substantial addition, adding some 40 per cent to the division's turnover.

The household and personal care products division saw a rise in sales from £47.9 million to £56.8 million in the six months ended September 30th, 1996. Operating profits increased from £7.8 million to £8.6 million.

However, IWP had noted that the management structures "necessary to underpin future growth, were less than our standards". This led to increased investment in management and infrastructure.

The latest acquisition is to be funded by a $100 (£66 million) million loan being arranged by NatWest, the parent of Ulster Bank, in the US. IWP chief executive and deputy chairman, Mr Joe Moran, yesterday said he could make "no comment" on the funding or on any pending acquisitions. However, the 10 year loan facility is expected to be completed at the end of next month. It will have a coupon of 7.7 per cent.

All the facility will be drawn down, the sources said. It is then expected to be converted into European currencies which will bring the coupon down to below 7 per cent.

After financing the latest British acquisition, IWP will have around £26 million left to make further acquisitions. Negotiations are continuing with other companies, but these are not thought to be at an advanced stage.

IWP expanded into Poland last year through the acquisition of a 60 per cent stake in the household and personal care products company, Polbita, for £2.9 million. It has expressed confidence that this will prove to bed good buy.

IWP's latest results showed a rise in sales from £74.5 million to £87.1 million in the six months to September 30th, 1996. Pretax profits grew by 10.1 per cent, from £8.75 million to £9.64 million.