First of its kind funding package is October Deal of the Month
A FIRST-OF-ITS-KIND financing package and acquisition is the selection for TheBusinessDesk.com’s Deal of the Month for October.
The deal goes right back to the beginning of the month and saw Kidderminster carpet manufacturer, Victoria, strengthen its portfolio with the acquisition of a rival in a deal worth more than £7.6m.
The acquisition of Abingdon Flooring Ltd was financed by a loan from the Business Growth Fund. Established in 2011, the Birmingham-based BGF was set up to help Britain’s growing businesses secure the funding they need for expansion.
BGF supported Victoria by way of a £10m investment programme aimed at building a strong and sizeable flooring group.
The investment is BGF’s first in a publicly listed company and saw Gavin Petken, BGF’s Regional Director for The Midlands join the Victoria board.
The deal saw Victoria acquire not just the Abingdon operation but its wholly-owned subsidiaries, Alliance Distribution and Distinctive Flooring. The total value of the deal is £7.655m. Additional deferred cash payments of up to £4.5m will be payable to Abingdon if three year performance targets are met.
Victoria will retain Abingdon’s existing bank facilities with RBS.
The deal also provided plenty of work for Birmingham’s advisory community. Financial due diligence came from BDO’s Graham Elsworth and Vinny Patel, with legal advice supplied by Wragge Lawrence Graham’s Jeremy Millington. Legal advice for Victoria came from Brown Rudnick’s Lena Hodge.
Petken said: “Victoria has built a fantastic reputation in the UK and overseas for supplying a wide range of quality flooring materials. We saw this as an excellent opportunity to back a company with global ambitions and the potential to expand organically and through acquisitions such as Abingdon.”
The deal faced tough competition in what a busy month for the dealmaking community.
Other notable transactions included the sale by Birmingham-based engineering group IMI of its Eley Ltd, Eley Americas Inc. and Accles & Shelvoke subsidiaries to LDC for £42m, and the investment into Birmingham-based retail design practice Green Room by Finance Birmingham – the fourth deal completed through its £56m Mezzanine Fund.
