Carpets group makes £250m European acquisition
Worcestershire carpets and floorcoverings group, Victoria, is to invest almost £250m in the acquisition of a Spanish floortiles group – its second major European acquisition in the sector in the space of a month.
The announcement to the markets of its acquisition of Valencia-based Keraben Group confirms reports earlier in the month that the Kidderminster firm was planning a major deal.
The latest deal will see Victoria invest £246.5m acquiring Keraben from its parent group, Tensile-Keraben Holdings – an associated company of Tensile Capital Management – and the group’s founding family.
The acquisition is payable in cash on completion and will be satisfied in part through a £180m shareplacing.
Victoria said Keraben was a large, well-invested business with a strong market reputation led by a proven, established management team which has successfully and consistently grown the business over recent years, executing a clear strategy to drive continued profitable growth.
The acquisition is expected to be significantly accretive to earnings per share for Victoria shareholders in the first full year of ownership – even after accounting for the impact of the new ordinary shares.
For the year ended December 31, 2016, Keraben generated audited revenues of €118.3m (£106.4m), adjusted EBITDA of €36.4m (£32.7m), and adjusted EBIT of €27.5m (£24.7m).
Its board expects that normalised earnings should be about 10% higher for the current financial year.
The acquisition continues Victoria’s drive into the European hard flooring market, following the £50m deal last month to acquire Italian floortiles group, Ceramiche Serra. This is expected to complete next month.
Victoria said the latest deal further enhanced its international reach and diversification of earnings.
In line with Victoria’s acquisition criteria, the management team at Keraben are being financially incentivised to run the business as part of Victoria for a minimum period of three years and to continue developing its growth.
Geoff Wilding, chairman of Victoria, said: “We believe that Keraben is a high-quality addition to the group. Notwithstanding its further strong organic growth prospects, the acquisition will be materially earnings accretive in the first year of ownership and continues to increase our geographic diversity.
“Post-completion, over 50% of Victoria’s earnings will be generated from outside the UK – continuing our transformation into a genuinely international flooring business.”
