Acquisition of Quest Carpets

RNS Number : 4073V

Victoria PLC

07 August 2015

 

7 August 2015

Victoria PLC

('Victoria', the 'Company', or the 'Group')

Acquisition of Quest Carpets

Victoria PLC, (LSE: VCP) a manufacturer, supplier and distributor of design-led carpets and floorcoverings, is pleased to announce the acquisition of Australian carpet manufacturer Quest Carpet Manufacturers Pty Limited and Quest Carpet Manufacturers Unit Trust, (together "Quest")(the "Acquisition"), for an initial cash consideration of approximately A$24.5 million (£11.5 million) and deferred cash consideration of A$10.5 million (£4.9 million), payable in instalments of A$3.5 million (£1.6 million) on the anniversary of completion for each of the next three years. The total consideration represents a multiple of a little under 5 times Quest's normalised EBITDA for the year ended 30 June 2015.

Operating from facilities in Dandenong (near Melbourne), Australia and employing a workforce of more than 200 people, Quest designs, sells and distributes premium quality carpets across Australia and New Zealand.

All key senior management of Quest 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 2015, Quest generated unaudited turnover of A$59.8 million (£28.1 million) and normalised EBITDA of A$7.1 million (£3.3 million). (Year ended 30 June 2014: turnover A$51.0 million (£24.0 million) and normalised EBITDA of A$5.9 million (£2.8 million)).

The Acquisition is being funded, in Australian dollars, using Victoria's existing facilities with Barclays Bank and HSBC.

The Acquisition confirms Victoria's strategy of growing its business with earnings enhancing acquisitions. This is Victoria's fourth acquisition in the last year and a half following the acquisition of Westex, Abingdon Flooring, and the Whitestone Group. The group now operates from 6 manufacturing sites in the UK and 3 in Australia.

Geoff Wilding, Chairman of Victoria PLC, commented:

"We are delighted Victoria PLC has been able to acquire Quest Carpets. It is an extremely well-run and growing business and it took some time to persuade the current owners to accept our offer. However Quest is highly complementary to our existing business in Australia and so, while we remained disciplined with our offer, I think the vendors would agree we were quite persistent in our pursuit.

The acquisition will be immediately earnings enhancing for Victoria's shareholders even before the significant benefits expected to flow from the increased scale of our operations in Australia."

Stephen Sunderland, Chief Executive of Quest, said:

"I and the other management remain completely committed to Quest. My fellow directors and I are immensely proud of what we have achieved since our founding in 1978 and believe the independence Victoria PLC gives its subsidiaries will ensure we maintain our unique culture while giving us the opportunity to grow and benefit from synergies as part of a larger group."

- Ends -

For more information contact:

Victoria PLC Geoff Wilding Alexander Anton	[phone]
Cantor Fitzgerald Europe (Nominated Adviser and Broker) Rick Thompson, Phil Davies, David Foreman, Michael Reynolds (Corporate Finance) David Banks, Tessa Sillars (Corporate Broking)	[phone]
Whitman Howard Limited (Joint Broker) Niall Devins, Ranald McGregor-Smith MHP Communications (Financial PR) Nick Denton	[phone] [phone]

 

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