Flooring group in talks to acquire Spanish manufacturer

Flooring group Victoria confirmed this morning it is in talks over the potential acquisition of Spanish ceramics manufacturer Ibero Porcelānico.

The Kidderminster business said it is part of its growth strategy to make “highly selective” acquisitions and therefore is frequently in discussions with a number of parties.

“The board can confirm that it is evaluating a number of opportunities including this one,” the company said.

“In the event that the potential acquisition were to proceed it would be financed from the company’s existing resources and be both leverage neutral and earnings enhancing.

“A further announcement will be made in due course as appropriate.”

In July, Victoria refinanced through the offer of €330m (£300m) in secured notes, which was three times over-subscribed, in a move to fix its debt until 2024 to help it maintain operational flexibility and support the company’s long-term growth strategy.

Shares in the business fell by 35% in two days, wiping more than £260m off its market value, after it revealed the plans.

However the successful refinancing, which is at a 5¼% fixed rate for five years, should mark the end of a difficult period for Victoria’s management.

Last November Victoria threw out plans to raise €450m (£400m) in a bond issue after it was carpeted by investors.

Its commercial performance appears unaffected by any impact from last year’s public failure to refinance. Earlier this month Victoria revealed a sixth-consecutive year of growth in underlying earnings as revenues jumped 35% to £574m.