Victoria buys Italian business for £50.4m
Carpets and flooring group Victoria has agreed to buy Italian ceramic flooring manufacturer, Ceramiche Serra for up to £50.4 million.
The Kidderminster-based business will pay £32.6n on completion, with the balance of £17.8m(the to be paid over the next four years, subject to the business meeting annual targets in earnings.
Serra, operating from sites in Serramazzoni, Sassuolo, near Bologna, the heart of the Italian ceramics industry. t sells to a combination of wholesalers, retail groups, and independent stores throughout Continental Europe, North America, and the Far East.
The acquisition is Victoria’s first move into the ceramic flooring market, which is the largest flooring sector in the world.
The Victoria board believes that there is significant opportunity for further acquisitions in the sector.
The management team at Serra have committed to running the business as part of Victoria for a minimum period of four years and continuing to develop its growth.
Completion of the acquisition is expected to take place in December.
Victoria chairman Geoff Wilding said: "Serra is a very important acquisition for us and one which reinforces our strategy of targeting earnings enhancing acquisitions to expand our business, in addition to our focus on organic growth. It will make an immediate positive contribution to Victoria’s performance whilst diversifying our market exposure. Post-completion, nearly 40 [er cent of Victoria’s earnings will come from outside the UK – continuing our transformation into a genuinely international flooring business.
“Shareholders will recall that we signalled our intention to expand into hard flooring some 12 months ago and subsequently acquired our first hard-flooring business, Australian manufacturer/distributor Dunlop Flooring, in January of this year. Since then we have conducted extensive due diligence on the sector in Europe and explored a multitude of potential opportunities, as well as recruiting a senior, director-level hard flooring expert in May of this year. Given this planning and preparatory work, Serra is the first of a number of acquisitions we expect to make in the ceramic flooring sector.
"It has been some eight months since our last acquisition, Avalon/Grass Inc in the Netherlands, which has now been fully integrated within Victoria and is contributing to our performance. Our strategy of achieving scale through acquisitions and using that scale to extract operational synergies continues to deliver value for the group and we look forward to developing the Serra business as part of Victoria.”
On completion, the enlarged gGroup will have 1,800 employees and operate from more than 10 sites in the UK, five in Australia, two in the Netherlands, one in Belgium and two in Italy.
