Victoria has agreed to pay £246.5m to buy Spanish ceramic tile manufacturer Keraben.
The group is issuing £180m of new shares to help pay for the deal and future acquisitions and borrowing £160m.
Karaben generated an EBITDA of £32.7m from sales of £106.4m last year and Victoria says profits will be 10% higher this year. Karaben’s management has agreed to remain for three years.
The share placing will make up 20.17% of the increased shares, but the company says the deal will increase earnings per share in the first full year of ownership, even allowing for the increased number of shares.
‘We believe that Keraben is a high-quality addition to the group. Notwithstanding its further strong organic growth prospects, the acquisition of Keraben will be materially earnings accretive in the first year of ownership and continues to increase our geographic diversity. Post-completion, over 50% of Victoria’s earnings will be generated from outside the UK: continuing our transformation into a genuinely international flooring business,’ said Geoff Wilding, Victoria executive chairman.
‘We are delighted by the level of support we have received from both existing and new investors, with the placing oversubscribed by a multiple of the funds sought.’