Card Factory (LSE:CARD) has struck a deal to buy FunkyPigeon.com, the online personalised card and gifting business, from WH Smith PLC (LSE:SMWH) for £24 million cash.
The greetings card retailer said the deal, which includes a standalone team in Bristol and Guernsey, supports its digital and omnichannel strategy, making it the UK’s second-largest online card and gift retailer.
Funky Pigeon made an average of £32 million in revenue in the last two years and around £5 million of EBITDA.
Card Factory CEO Darcy Willson-Rymer says the acquisition "marks a significant step forward in cardfactory's strategy to build a scaled, competitive digital presence in the celebration occasions market.
"It brings a high-quality platform and proven technology, accelerating our ability to compete in the direct-to-recipient card and gifting segment, so supporting our ambition to become the leading omnichannel retailer in our sector."
He said once the deal receives regulatory clearance, the plan is to extract at least £5 million of annual synergy benefits by the 2027 financial year through integration of technology platforms and optimisation of manufacturing and fulfilment operations, making the deal earnings enhancing in that year.
The deal will be funded from a drawdown of up to £35 million under the FTSE 250 group’s existing borrowing facility.