Victoria snaps up Abingdon in £12m deal
Victoria Carpets is to buy rival Abingdon Flooring for up to £12.1m, adding the Stainfree, Wilton Royal and Distinctive Flooring brands to its portfolio.
It is its second major deal in less than a year after paying £16m for Westex last November.
Barclays is providing funding for the deal alongside a £10m loan from Business Growth Fund, which invested £6m in Furniture Village in August.
Victoria will pay £7.655m in cash and up to a further £4.5m if Abingdon meets profits targets over the next three years. In the year to 31 March Abingdon had a pre-tax profit of £2.2m, up 62.9%, on sales of £75.1m, up 6.8%.
Abingdon will operate independently and its senior management team will remain with the manufacturer.
BGF's investment sees its regional director for the Midlands Gavin Petken join the Victoria board and an option of 5% of Victoria's shares. The option can come into place in three years time, if there is a change of ownership at Victoria or if Geoff Wilding, Victoria's executive chairman sees his shareholding drop from 50% to below 30%. Victoria will pay 10% interest on BGF's investment, with no capital repayments for the first five years with payment the spread over three years.
'We are delighted that the company has acquired Abingdon with the support of BGF. The acquisition of Abingdon Flooring represents the second significant step forward for Victoria, following the acquisition of Westex last year. By integrating Abingdon into the Group, we anticipate accelerating Victoria's growth by enhancing its combined offering and reach across the UK,' says Wilding.
'Overall, when added to our existing operations the two acquisitions have together substantially increased the scale, breadth and reach of Victoria's offering and are expected to be immediately earnings enhancing. Our focus is on integrating the business and delivering the synergies and growth we have identified.'