Carpetmaker Victoria expands with £5.7m acquisition of UK rival
WORCESTERSHIRE carpet manufacturer Victoria has expanded its business with the acquisition of a rival carpet group in a deal worth £5.75m.
The Kidderminster-based group has taken over the Whitestone Weavers group of companies, comprising Whitestone Weavers, Carpet Line Direct, Gaskell Mackay Carpets, View Logistics and Thomas Witter Carpets.
The deal is based on a deferred cash consideration of £2.271m payable on March 31, 2015; £1.748m payable in April 2016; and £2.536m payable in January 2018. An additional deferred cash payment of up to £1.5m will be payable to the vendors of Whitestone provided annual performance targets for increased EBITDA are achieved over a three year period.
Victoria has separately agreed to allow Whitestone management to reinvest £0.9m in the business by subscribing for new ordinary shares of 25p in the company.
Operating from facilities in Hartlepool and employing more than 100 people, Whitestone designs, sells and distributes carpets across the UK: The Whitestone product portfolio consists of woven and tufted carpets in both wool & synthetic yarns supplying the higher end domestic market; Gaskell Mackay is heavily involved in the commercial and hospitality & leisure sectors; Thomas Witter supplies house builders; and Carpet Line is in domestic and commercial end of the flooring market.
Whitestone also outsources its entire yarn and carpet manufacturing process to companies that are not part of the existing Victoria group.
All key senior management of Whitestone will remain with the business and it will continue to operate independently. It is expected to benefit from the synergies of an enlarged group.
For the financial year ended June 30, 2014, Whitestone generated turnover of £33.9m, EBIT of £1.8m and a pre-tax profit of £1.7m.
Funding for the acquisition is being provided by Victoria’s bankers, Barclays, in the form of an additional £5m facility. Victoria will retain Whitestone’s existing trading bank facilities with HSBC.
Victoria said the acquisition confirmed its strategy of growing its business with earnings enhancing acquisitions. The annualised turnover of the enlarged group will be more than £200m, operating from six manufacturing sites in the UK and two in Australia.
Geoff Wilding, Executive Chairman of Victoria, said: “We are delighted Victoria has been able to acquire the Whitestone group. It is extremely well regarded within the industry and there are significant opportunities for operational synergies, which will improve the service to our customers and enhance the returns to shareholders. This is Victoria’s third major acquisition in just over a year following the acquisition of Westex and Abingdon Flooring.
“Overall, when added to our existing operations the three acquisitions have together substantially increased the scale, breadth and reach of Victoria’s offering and all are expected to be immediately earnings enhancing. Our focus is on integrating Whitestone and delivering the synergies and growth we have identified.”
