Likewise Group has growth plans covered with £30m swoop
Birmingham-based Likewise Group, the distributor of floorcoverings and mattings, has agreed to buy Valley Wholesale Carpets in a deal worth £30m.
The company said Valley Wholesale Carpets will increase its share of the UK flooring market to approximately 5.6% of the £1.9bn UK industry, expanding its position as one of the leaders in the market.
The acquisition will increase Likewise’s presence, particularly in the South East of England and the Midlands, providing an opportunity to widen the group’s UK logistics network.
Valley Wholesale Carpets generated audited revenue of £47.3m in the year ended 30 September 2021, up 32% on the previous financial year, and EBITDA of around £5.7m, up 89%.
The acquisition is to deliver approximately 25% earnings enhancement during the first full year of ownership.
The deal comprises initial consideration of £24m which is payable at completion, a deferred consideration of £1m and the issue of five million ordinary shares in Likewise.
Tony Brewer, chief executive of Likewise Group, said: “The Likewise team have made significant progress over the last eighteen months and the acquisition of Valley Wholesale Carpets is a major additional step forward in the aspirations of Likewise to develop a meaningful flooring distribution business throughout the UK.
“Many thanks to our management and staff for their contribution and efforts in addition to the support of our suppliers, customers and shareholders to enable the development of Likewise to date and we look forward to an exciting future.
“We also welcome the management and Staff of Valley Wholesale Carpets and whilst being an autonomous business it will very much form part of Likewise and our future. We also give our best wishes to Stephen, David, Kate and the Mitchell family for the future.”
At the end of September, Likewise released its first interim results since floating on AIM, showing a 52.2% increase in turnover in the first half of 2021, compared to 2020.
Turnover to 30 June 2021 was up to £28m, from £18.4m in the first half of 2020, and gross profit margin up to 29.4%. Operating profit before tax increased to £700,000, from a loss of £1.7m in the similar period in 2021.
As a result, the board declared a maiden dividend in 2022.
