£30m Italian deal for Victoria
Kidderminster-based carpets and flooring firm Victoria has bought two Italian firms in a deal worth just over £30 million.
It has added ceramic tile distributors Ceramica Colli and Vallelunga and the shares of ceramic tile manufacturer Ceramiche Santa Maria.
They are located near to 126-year-old Victoria’s existing Italian operations.
Executive chairman Geoff Wilding said: “International demand for the ceramic tiles produced by our Italian business continues to grow at a remarkable rate due to the successful blend of quality, style, and value. The use of a high proportion of recycled raw materials in the tiles has proven attractive to consumers. However, maintaining service levels for our customers has, in recent months, required the business to outsource production to third parties to meet the ever-increasing demand. This is expensive in terms of margin forgone – and is addressed by this acquisition.
"This is the first – and smallest – of several acquisitions we expect to conclude over the weeks and months ahead. Nevertheless, we are delighted to have acquired these businesses, which are immediately earnings accretive, but will also enable our Italian business to continue its growth and create value for shareholders.”
The deal follows the February 2020 acquisition of the factory, plant, and brands of Ceramiche Ascot which has recently been operating at full capacity.
Victoria, which has its Victoria Carpets headquarters in Worcester Road, had said it planned to expand after seeing demand soar in lockdown.
It raised £430 million through a bond issue in February and said it would use half to fund acquisitions of more firms as it continues its expansion.
The group has grown through buying rival companies in recent years.
Full integration of the Italian businesses is planned by the end of the financial year and Victoria says the new brands will help to drive revenue growth.
Victoria also has operations in Spain, Belgium, the Netherlands and Australia and employs approximately 3,500 people across more than 20 sites. It is the UK's largest carpet manufacturer and the second largest in Australia, as well as the largest manufacturer of underlay in both regions.
Earlier this month the group announced record results for its latest financial year despite the impact of the coronavirus pandemic.
The business expects revenue for the year to April 3 to be more than £640m – up from £621.5m for the previous year – with underlying earnings before tax rising from £118.1m to more than £120m.
