Victoria PLC Acquires Whitestone Weavers group
Victoria PLC, (LSE: VCP) a manufacturer, supplier and distributor of design-led carpets and floorcoverings, is pleased to announce the acquisition of the Whitestone Weavers group of companies, comprising Whitestone Weavers Limited, Carpet Line Direct Limited, Gaskell Mackay Carpets Limited, View Logistics Limited and Thomas Witter Carpets Limited (together "Whitestone")(the "Acquisition"), for an initial cash consideration of approximately £5.748 million and deferred cash consideration of (i) £2.271 million payable on 31 March 2015; (ii) £1.748 million payable in April 2016; and (iii) £2.536 million payable in January 2018. Additional deferred cash consideration of up to £1.5 million will be payable to the vendors of Whitestone provided annual performance targets for increased EBITDA are achieved over a three year period, payable in annual instalments of up to £0.5 million over each of the next three years.
Victoria has separately agreed to allow Whitestone management to reinvest £0.9 million in aggregate of the initial cash consideration by subscribing for new ordinary shares of 25 pence each in the Company ("Ordinary Shares"). The number of shares will be determined by the share price of Victoria at market close today. The new Ordinary Shares are expected to be admitted to trading on the AIM market of the London Stock Exchange on 20 January 2014 ("Admission"). The new Ordinary Shares will rank pari passu with the existing Ordinary Shares in issue.
Operating from facilities in Hartlepool and employing a workforce of 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 outsources their 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, whilst benefiting from the synergies of an enlarged group, in its ongoing drive for profitable growth.
For the financial year ended 30 June 2014, Whitestone generated turnover of £33.9 million, EBIT of £1.8 million and profit before tax of £1.7 million. Net assets were £5.9 million (Year ended 30 June 2013: turnover £27.0 million, EBIT of £1.7 million and profit before tax of £1.6 million).
Funding for the acquisition is being provided for by Victoria's bankers, Barclays Bank, in the form of an additional £5 million facility. Victoria will retain Whitestone's existing trading bank facilities with HSBC.
The Acquisition confirms Victoria's strategy of growing its business with earnings enhancing acquisitions. The annualised turnover of the enlarged group will be more than £200m, operating from 6 manufacturing sites in the UK and 2 in Australia.
Geoff Wilding, Executive Chairman of Victoria, commented:
"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."
Steve Byrne, Managing Director of Whitestone, said:
"It will be a privilege to be part of such a distinguished group including Victoria Carpets, Westex and Abingdon. There are many synergies between the newly enlarged groups, not just in terms of logistics, but also in the wealth of experience and management talent. We are confident these synergies will enable the group over the coming months to increase the returns of all operations with improved efficiency and extra buying power. The result will be enhanced service to our customers.
"I and the other managers are also delighted to be becoming shareholders of Victoria, reflecting our confidence in the group as a whole and the future value we believe will be created by the enlarged business."