Carpet group Victoria in biggest ever takeover deal for Spanish tile maker
Kidderminster floorings group Victoria confirmed today it has bought a Spanish tile firm in its biggest ever takeover deal worth £246.5 million.
That figure is just short of Victoria's entire £255m revenue income just two years ago.
It is by far the biggest of a string of takeovers mounted by Victoria over recent years as it expanded its operations in the UK, Australia and in Europe.
The 122-year-old company is still run from its Kidderminster headquarters in Worcester Road, where it employs around 150 people.
The latest acquisition is Grupo Keraben, which makes floor and wall ceramic tiles, and follows Victoria's confirmation last week that it was in talks with the Spanish company.
Geoff Wilding, the chairman of Victoria who has driven the massive expansion drive since taking over the business five years ago, said: "We believe that Keraben is a high-quality addition to the group.
"Notwithstanding its further strong organic growth prospects, the acquisition of Keraben will be materially earnings accretive in the first year of ownership and continues to increase our geographic diversity.
"Post-completion, over 50 per cent of Victoria's earnings will be generated from outside the UK - continuing our transformation into a genuinely international flooring business."
The deal is partly being paid for by a £180 million share sale, and Mr Wilding hailed the level of support that had received from both existing and new investors, saying it had been oversubscribed several times over.
Victoria is expecting the takeover to significantly boost its earnings over the coming year. In 2016 Keraben generated £106.4m in revenue, with pre-tax earnings of £24.7m. Earnings are expected to be 10 per cent higher this year.
The takeover is part of Victoria's drive into the European hard flooring market, following its takeover of Italian tile firm Ceramiche Serra for £50m.
Victoria is now the UK's largest carpet manufacturer and the second biggest in Australia. With operations in Belgium and the Netherlands it currently employs around 1,800 people across 20 sites.
Ceramic flooring is the world's largest flooring sector, representing over 60 per cent. of the 12.5 billion sq m of flooring sold globally and 30 per cent of flooring sold in Europe, so the recent takeovers make sense for Victoria, opening up a new market for the business.
The deal is taking place at high speed. An agreement was reached on November 15 and the takeover will be completed later today.
Along with the share sale, Victoria is paying for the takeover with new banking facilities from its group of lenders – Barclays, HSBC, RBS and Allied Irish Ban – including a new term loan of £160 million.
Meanwhile Victoria says current trading is on track with market expectations and it expects to deliver growth from within the business as well as from its acquisitions.
This is despite a major reorganisation of manufacturing that saw 60 jobs axed from its Kidderminster factory earlier this year.
It ended carpet manufacturing at the factory, moving it to two other factories. Kidderminster remains the company's head office and centre of product development, with new warehousing and showroom facilities.
