Clarke & Clarke to be snapped up by multi-national in £42.5m deal

LANCASHIRE-based worldwide distributor of interior fabrics Globaltex – trading as Clarke & Clarke – is to be acquired by Walker Greenbank plc in a £42.5m deal.

The business, founded by husband and wife Lee and Emma Clarke in 1999, has established the Clarke & Clarke brand as one of the leading names in the home furnishings market, best known for the quality of its fabric and cutting edge design.

From its Haslingden headquarters and design studio in Mobberley in Cheshie, the company distributes to interior design and retail customers in more than 80 countries.

In 2015, the fast growing business generated revenues of £22.4m and EBITDA of £3.8m.

Seneca Partners and Fieldfisher advised the couple on the transaction, which is subject to shareholder approval.

Clarke & Clarke, which will continue to be led by Lee Clarke as chief executive, has ambitious plans for the future as part of Buckinghamshire-headquartered interiors multi-national Walker Greenbank.

The brand and more recently established Studio G brand, complement Walker Greenbank’s other leading brands such as Zoffany, Sanderson, Morris & Co., Harlequin, Scion and Anthology.

Lee Clarke said: “Over recent years we have grown Clarke & Clarke into a successful, internationally recognised, design-led brand in the home furnishings market, something we are extremely proud of. With Walker Greenbank’s support and resources, I am excited about our plans for the future and the next stage of our journey.

“I would like to thank the teams at Seneca Partners and Fieldfisher for their excellent advice and management of the process throughout.”

Gordon Lane, head of corporate finance at Seneca Partners said: “Lee and Emma have built a first class business.

“The Clarke & Clarke brand is highly regarded and complements Walker Greenbank’s existing portfolio. With the support of Walker Greenbank and a strong management team I am confident the business has a bright future.”

Matt Fleetwood, head of Fieldfisher’s Manchester office, said “We were delighted to act for Lee and Emma.

“Clarke & Clarke is such a successful name in the home furnishings market and is leading the industry from its base in Lancashire. Representing them on such a significant transaction was a pleasure and is part of the corporate law advice we offer to business on matters such as mergers, joint ventures and public company takeovers.”

AIM-listed Walker Greenbank announced its intention to buy Clarke & Clarke today alongside a placing to raise £17m to part-fund the deal.

The initial outlay will be £25m in cash on a debt free/cash free basis payable on completion of the deal.

There will a further performance related earn-out consideration of up to £17.5m.

The remaining £8m of the cash element of the consideration is being met through drawdown under the Company’s existing bank facilities and the company’s existing cash resources. The placing is being underwritten by Investec.

The vendors were advised by Gordon Lane, Andrew Stubbs and Paul Leyland at Seneca Partners (corporate finance); Matt Fleetwood and Rebecca Bennett at Fieldfisher (legal) and Patrick Morris at Fairhursts (tax).

Vendor due diligence was provided by Richard Harding and Stuart Thwaites at EY (financial and tax) and Nick Ashcroft at Pragma Consulting (commercial).