Interior furnishings firm Walker Greenbank plc (LON:WGB) unveiled an earnings enhancing agreement to buy Lancashire based wallpaper group Clarke & Clarke in a deal, which values the latter at more than £40mln.
Walker Greenbank's brands include Sanderson, Zoffany, Scion and Anthology, and it has struck a conditional agreement with shareholders of Clarke's parent company Globaltex 2015 Limited to buy all of Globaltex's shares.
The initial consideration will be £25mln, a total of £17mln of which will be funded by a placing by Walker of 8.9 mln shares at 190p each.
The remaining £8mln is being met from the company's existing bank facilities and cash.
Clarke & Clarke has a record of strong revenue and profit growth and for the financial year to end 2015 it generated revenue of £22.4 million and adjusted EBITDA of £3.8 million.
In a separate announcement, Walker issued its results for the six months to July 31, which showed adjusted profit before tax after insurance proceeds up 2.7% to £3.78 million compared to £3.68 million in the same period of 2015, on group sales, which were down 8.7% at £41.83mln against £45.83mln in 2015.
Shares dropped 0.74% to stand at 202p.