Worcestershire carpet maker secures £218m acquisition war chest

Fri, 23 Oct 2020 | BUSINESS NEWS

Worcestershire-based carpet maker Victoria has secured investment of up to £218 million from US-based Koch Industries to support its ongoing acquisition drive. The agreement also includes an option to secure a further £100 million in funding.

Victoria was founded in 1895 and first listed in 1963. It has grown to become an international business with operations in Spain, Belgium, Australia and the Netherlands, as well as the UK, employing around 3,400 staff across over 20 sites.

The royal carpet maker has signed a commitment with KED Victoria Investments, an affiliate of wholly-owned Koch subsidiary Koch Equity Development (KED).

Koch has committed to investing an initial £175 million through convertible preferred shares which will be issued by Victoria. The funding will enable Victoria to capitalise quickly and decisively on M&A opportunities.

The funding is conditional upon entering into definitive agreements, as well as the approval of Victoria’s shareholders.

In a statement, Victoria said: “The board believes that the investment from KED will have significant positive attributes for shareholders and lenders.”

“In particular, the future M&A transactions that the proposed investment will finance, and the consequent anticipated growth in EBITDA, are expected to reduce the company’s senior leverage ratio and improve the company’s credit rating over time.”

Victoria’s directors view the company’s long-term prospects as excellent, with flooring always needed, as well as requiring continual repair and upgrading. The company feels that the COVID-19 pandemic has revealed rich acquisition and growth opportunities across the UK and Europe.

More:  Prominent Liverpool recording studios up for sale

Negotiations have also begun for Koch to acquire 12.5 million Victoria shares from one of the company’s current investors for £43.75 million, 9.97 per cent of the issued share capital in the firm. Victoria has proposed.

Victoria, meanwhile, has begun discussions with Invesco over a proposed 8.5 million share buy back, in a deal worth £29.9 million. Spruce House Partnership LLC, which holds 14.8 per cent of Victoria shares, has also started talks with Invesco over buying 3.6 million shares.

Geoff Wilding, Executive Chairman of Victoria, said: “Victoria’s business model has proven resilient this year during the most difficult trading conditions in living memory. So, the time has now come to again focus on growth and the capital provided by Koch will enable us to deliver significant value creation while maintaining stable and secure debt leverage ratios.”

“I am delighted to bring the capital, resources, and deep industrial expertise of the largest privately held company in the United States to Victoria’s next phase of growth as we execute on the exceptional organic growth and acquisition opportunity ahead.”

Blake Ressel, MD of Koch Equity Development, added: “We are delighted to be partnering with Victoria. We have conducted due diligence over the last few months, and we are confident in Victoria’s strategy, its management team, and the size of the market opportunity. We expect our investment to help Victoria accelerate execution of its growth plans.”

More:  Subprime lender Amigo abandons sale after buyer walks away

Find businesses for sale here.

If you are looking for an exit, we can help!

Share this article

Latest Businesses for Sale

Bespoke Manufacturer & Instillation To The Insulation Sector
Oxfordshire, South East, UK

The business manufactures high quality thermal covers designed to protect and insulate all types of valve, pipe, heat exchange or actuator. They are designed to be user friendly and easy to install either by an individual or on of the companies fitte…

Asking Price:
Offers Invited

Brand Leading Outdoor Catering Appliances Manufacturer
UK Wide, North West

Modern, well-positioned UK-based freehold premises to be included in sale. Genuine scope for further growth with development of existing product range and the addition of a sales function. Offers invited.

Asking Price:
Offers Invited

Fibre Optic & Copper Networking Product Manufacturer
UK Wide

Offers an extensive range of products, providing cost-effective solutions for clients. Secured a strong pipeline of work valued at over £1m for the next financial year.

Asking Price:
Offers Invited

View more businesses for sale

More from: | Category: M&A News