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Victoria PLC (VCP)


Tuesday 04 May, 2021

Victoria PLC

Acquisition of Edel Group BV

RNS Number : 3305X
Victoria PLC
04 May 2021

For Immediate Release                                                                                                                 4 May 2021  

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Victoria PLC

('Victoria' or the 'Group')

Acquisition of Edel Group BV


Continued European Expansion


Victoria PLC, (LSE: VCP) the international designers, manufacturers and distributors of innovative flooring, is delighted to announce the substantial expansion of its existing artificial landscaping grass business with the acquisition of Edel Group BV ("Edel"), the Netherlands-based designers, manufacturers, and distributers of artificial grass and carpets.


Key terms of the Acquisition


· For the year ended 31 December 2020, Edel generated unaudited total revenues of €47.6 million (£41.4m1) (2019: €44.3m) and normalised EBITDA of €10 million (£8.7m1) (2019: €7.9m).

· This represents an above 20% operating margin.

· Total consideration paid was €49.4 million (£42.9m1). In addition, Edel has approximately €20.0 million (£17.4m1) of net debt.

· The purchase price was funded entirely from the Group's cash balances. Victoria's leverage remains in line with our stated financial policy following completion, with the ratio of total net debt to pro-forma EBITDA2 of c. 3.3x and senior net debt to pro-forma EBITDA of c. 3.0x.

· Edel is an exceptionally well invested business with state-of-the-art and well-maintained yarn extrusion, tufting and backing production facilities located in the Netherlands and Germany, making it a best-in-class producer.


The acquisition of Edel will be immediately earnings-accretive.


Strategic rationale for the Acquisition


Established in 1918, Edel primarily supplies artificial grass for domestic and landscaping purposes across Europe, a market in which Victoria already has a strong presence following its February 2017 acquisitions of Avalon and GrassInc. This is a high-growth sector of the industry with European demand for artificial grass expected to achieve double-digit growth from 82.4m m2 in 2020 (up from c.60m m2 at the time of the Avalon and GrassInc acquisition) to 110.6m m2 in 2023 (10.3% p.a. in volumes) AMI Consulting (2020 ).   Additionally, Edel supplies carpet backing services utilising the same equipment.


Edel operates through three business units:

· Schramm, based in Rahden, Germany: yarn extrusion for artificial grass;

·   United Works, located in Genemuiden, Netherlands: tufting and backing of artificial grass and backing of carpets; and

· Royal Grass, based in Uden, Netherlands: the marketing and sales of super-premium artificial grass for landscaping and leisure end-markets.


Following very good revenue growth of 7% p.a. over the previous three years, Edel displayed remarkable resilience during 2020, with revenues growing by 7.4%, despite Covid-19, alongside a corresponding increase in earnings. Demand for domestic landscaping artificial grass increased as consumers confined to their homes, focused on home and garden improvement.


The outlook for domestic demand remains positive with growing consumer acceptance of artificial grass due to enhanced realism and increasing awareness of its advantages when compared with natural grass, including limited maintenance and water requirements. Furthermore, there is a backlog in municipal and commercial landscaping applications (e.g. road verges and hotels), school and play areas and sports landscapes, which were deferred during 2020.


The integration of Edel with Victoria's existing artificial grass business will create the largest premium landscaping grass group in Europe with revenues of more than €77 million and significant opportunities for value-creating commercial and operating synergies:

· Victoria currently outsources the production of c.4 million m2 of artificial grass. Capitalising on the manufacturing capabilities of Edel and insourcing this production will increase the margin on Victoria's existing artificial grass revenue.

· Both Edel and Victoria have extensive, but largely non-overlapping distribution networks across Europe and the directors believe there is a real opportunity to grow the combined revenues by collaboration on sales and distribution.

· The increased scale of the integrated business will reduce raw material costs and improve productivity at the factories, with a consequential improvement in operating margin. The Board does not envisage significant integration costs.

· Like all companies acquired by Victoria, Edel will continue to operate with a significant degree of autonomy under experienced and committed managers, whilst benefiting from being part of a much larger group in its ongoing drive for profitable growth.


The Acquisition of Edel is another step in Victoria's strategy of growing its business with earnings-enhancing acquisitions, and then using available synergies to drive further increases in margin and revenue. The Board believes that Edel presents an excellent strategic fit with Victoria's existing business and will have strong long term growth prospects as part of the Group.


Philippe Hamers, Group Chief Executive, commented:

"Victoria's 2017 investment in the premium artificial landscaping grass sector has been very successful and this acquisition represents an opportunity to create Europe's largest and most profitable business in the sector. The addition of production facilities benefits our customers by enabling them to source locally in Europe, avoiding inflationary and disruptive imports from the Far East. Furthermore, the outlook for this product category is positive due to growing consumer acceptance and increasing demand for sustainable products that address climate change.


Geoff Wilding, Executive Chairman, said:

"Victoria has, so far this financial year, invested a little over £90 million to add approximately £17 million of EBITDA to the Group. We continue to have substantial amounts of capital to deploy and are in active discussions with additional high-quality opportunities to grow our business. Therefore, shareholders can expect further acquisitions in the weeks and months ahead."


1 Applying a GBP:EUR exchange rate of 1.150

2 Leverage ratios calculated in-line with the Group's debt facilities


The person responsible for arranging the release of this announcement on behalf of the Company is Michael Scott, Group Finance Director.


For more information contact:

Victoria PLC

Geoff Wilding, Executive Chairman

Philippe Hamers, Group Chief Executive

Michael Scott, Group Finance Director

+44 (0) 1562 749 610


N+1 Singer (Nominated Adviser and Joint Broker)

Rick Thompson, Phil Davies, Alex Bond



+44 (0) 207 496 3095

Berenberg (Joint Broker)

Ben Wright, Mark Whitmore, Tejas Padalkar


Peel Hunt (Joint Broker)

Adrian Trimmings, Andrew Clark


Buchanan Communications (Financial PR)

Charles Ryland, Chris Lane, Vicky hayns, Tilly Abraham

+44 (0) 203 207 7800


+44 (0) 207 418 8900


+44 (0) 20 7466 5000


About Victoria

Established in 1895 and listed since 1963 and on AIM since 2013 (VCP.L), Victoria PLC, is an international manufacturer and distributor of innovative flooring products. The Group, which is headquartered in Kidderminster, UK, designs, manufactures and distributes a range of carpet, flooring underlay, ceramic tiles, LVT (luxury vinyl tile), artificial grass and flooring accessories.


Victoria has operations in the UK, Spain, Italy, Belgium, the Netherlands and Australia and employs approximately 3,700 people across more than 25 sites. Victoria is the UK's largest carpet manufacturer and the second largest in Australia, as well as the largest manufacturer of underlay in both regions. 


The Group's strategy is designed to create value for its shareholders and is focused on consistently increasing earnings and cash flow per share via acquisitions and sustainable organic growth. (Further information about Victoria can be found on its website,




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