Victoria makes £50m ceramic push
Victoria has returned to the acquisition trail with the £50m purchase of Italian ceramic flooring manufacturer Ceramiche Serra, and indicated it tends to make further buys in the sector.
The company is paying £32.6m upfront with the balance payable over four years depending on Serra reaching profit targets. Its management has agreed to stay for at least four years.
Last year Serra made EBITDA of £9.4m from sales of £25.2m.
‘Serra is a very important acquisition for us and one which reinforces our strategy of targeting earnings enhancing acquisitions to expand our business, in addition to our focus on organic growth. It will make an immediate positive contribution to Victoria's performance whilst diversifying our market exposure. Post-completion, nearly 40% of Victoria's earnings will come from outside the UK, continuing our transformation into a genuinely international flooring business,’ said Geoff Wilding, Victor executive chairman.
‘The acquisition of Serra continues Victoria's successful strategy of growing its business with earnings-enhancing acquisitions, and using scale and the group's industry expertise to drive further increases in profits via cost savings and revenue growth. Serra is an excellent strategic acquisition in line with the group's stated intention to further develop its hard flooring business. Serra does not currently sell into the UK, and following completion, almost 40% of Victoria's earnings will come from outside the UK. This also creates an opportunity to introduce Serra's product into the UK.
‘Ceramics is the largest flooring sector in the world. 62% of the 12.5billion square metres of flooring sold globally each year, and 30% of all the flooring sold in Europe, is ceramic. There is significant opportunity for further acquisition-driven growth and we have already identified a number of suitable targets. These additional acquisitions will provide significant opportunity for a number of commercial, operational and financial synergies, which are expected to create further value for Victoria's shareholders - just as it has done successfully in the carpet sector.
‘Serra has invested in productivity-enhancing technology, resulting in fewer than 61 employees producing 10.5million square metres of ceramic flooring per annum. The existing management team, which is highly regarded by the industry, will remain with the business for a minimum of four years providing continuity.’