Before DFS Furniture Plc (LON:DFS) decided to buy Sofology, the two companies were locked in a legal dispute over branding in what was described as a "real case of David and Goliath".
Sofology used to be called Sofaworks but had to change its name after a High Court ruled in June 2015 that its brand name was too similar to that of DFS-owned The Sofa Workshop.
The court held that Sofawork’s use of its trade name constituted a misrepresentation that could cause material damage to Sofa Workshop’s goodwill.
At the time, Sofa Workshop said it was a relatively small name by comparison to Sofaworks so it was pleased that the court ruled in its favour to protect its brand from being passed off as its rival.
Sofology chief executive Jason Tydesley had said he was "dumbfounded" by the suggestion that the firm had been passing itself off as Sofa Workshop.
”Sofaworks versus DFS (masquerading as Sofa Workshop) has been a real case of David and Goliath, and whilst we are flattered at being seen as such a threat to DFS, this judgement has sadly gone in favour of the big boys with big pockets," he said.
"For this judgement to state that we are passing off as Sofa Workshop, makes no sense to us."
Now it seems the two have put their differences behind them, with DFS swooping in to buy Sofology for £25mln.
READ: DFS Furniture snaps up rival Sofology for £25mln
Sofology’s management, including Tydesley, will stay on to run the privately owned group, which has 37 stores but is best known for its online presence.
The deal is expected to be earnings accretive the first full year and DFS has identified £4mln of savings from combined purchasing of advertising, interest-free-credit, upholstery and other services such as the more efficient use of the van fleet.
One-off integration costs will amount to £5mln over five years.
“DFS store performance on overlapping retail parks shows limited impact, suggesting a different customer base and a complementary fit,” said UBS, reiterating a ‘buy’ rating and target price of 275p.
“DFS has expertise and a good track record of integrating and growing smaller brands, such as Dwell and Sofa Workshop.”
Shares in DFS jumped 4.68% to 223.95p in midday trading.
The firm has had two name changes, having previously been called CSL until rebranding itself as Sofworks in 2013.
Following its most recent rebranding, Sofology posted a loss of £8.6mln in 2016 on sales of £143mln due to higher costs related to the pound’s weakness.