Carpet maker Victoria rolls out growth with £65m acquisition
WORCESTERSHIRE carpet maker Victoria has strengthened its portfolio with the £65m acquisition of a rival manufacturer.
The company has agreed to acquire the entire issued share capital and shareholder indebtedness of Interfloor Group from Milestone Capital, Hutton Collins Partners, and the group’s management.
Interfloor, based in Haslingden, Lancashire, is a leading manufacturer of carpet underlay and related accessories, primarily through long established brands Treadaire and Duralay, and the Gripperrods and Stikatak accessory brands. The firm was created by the merger of Tredaire and Duralay in 2002, with a heritage that dates back to the 1940s. Since 2005, Interfloor has been owned by Milestone Capital Partners, Hutton Collins Capital, and members of the management team.
As at May 30, 2015 Interfloor had total assets of £52.24m.
The deal will see all key operational management of Interfloor remain with the business and it will continue to operate independently, while benefiting from the synergies of the enlarged group, in its ongoing drive for profitable growth.
Victoria said the acquisition was a strong strategic fit with its growth strategy and the directors believed that Interfloor would have strong long term growth prospects as part of the group.
It said the acquisition would provide a number of commercial, operational and financial benefits which are expected to create value for shareholders.
In addition, the directors said they did not envisage significant integration costs arising from the acquisition, which is expected to be materially earnings enhancing with significant opportunities to improve EBITDA margin.
Geoff Wilding, chairman of Victoria, said: “We believe that Interfloor, as the market-leader, will be an excellent addition to the group, bringing the complementary established underlay brands of Tredaire and Duralay in alongside our growing portfolio of well-respected carpet and hard-flooring brands. In the UK, Interfloor and Victoria share many of the same customers and there will be significant opportunities to capitalise on this.
“In line with our other recent acquisitions, the acquisition will be materially earnings enhancing and value creating for shareholders. Working in conjunction with the very experienced operational management team at Interfloor, we expect to be able to drive operational efficiency improvements in future years.
“In the board’s view this is another high quality acquisition and we are pleased to welcome Interfloor to the group.”
As part of this transaction, Victoria said that Cantor Fitzgerald Europe had placed 2,504,223 new ordinary shares of 25p each in the capital of the company at a placing price of 1230p per ordinary share. Additionally, £30.8m has been raised by the sale of the vendor placing shares to fund the cash consideration due to the sellers.
Cantor Fitzgerald Europe has placed a further 402,633 new ordinary shares at the placing price to raise a further £4.95m.
The remainder is from Victoria’s own banking facilities.
Cantor Fitzgerald Europe is acting as nominated adviser, broker and sole book runner and placing agent in connection with the placing. Whitman Howard is joint broker to the company in connection with the placing.
Birmingham-based Catalyst Corporate Finance advised the shareholders of Interfloor Group.
