Victoria PLC (LON:VCP) announced the further expansion of its North American operations with the acquisition of Cali Bamboo Holdings Inc. for US$76.1mln (£55.1mln) in cash.
Cali is a flooring distributor with organic annual growth of 17% for the past five years via its online B2C customer acquisition model, data-driven analytics, a consultative sales team and direct delivery capability, alongside B2B channels.
READ: Victoria eyes further acquisitions as demand stays strong
The acquisition of Cali will be immediately earnings-accretive, the UK flooring group said.
For the 12 months ended 30 April, Cali generated unaudited total revenues of US$171.6mln (£124.3mln) with underlying earnings (EBITDA) of US$13.8mln (£10.0mln).
It also had US$27.8ml (£20.1mln) of net debt, which was repaid on completion.
Victoria said the integration of Cali with its existing business will expand US distribution operations, which currently makes US$33mln of yearly sales. The US flooring market is worth US$29bn.
The acquisition also gives Victoria access to the intellectual property and online management experience of Cali, which it will leverage to partner with its key retailers to speed up growth in its existing UK, European, and Australasian markets.
“Victoria has now invested a little over £160mln in the current financial year to add approximately £27mln of EBITDA to the group,” said executive chairman Geoff Wilding in a release.
“We continue to have substantial amounts of capital to deploy and are in active discussions with additional high-quality opportunities to grow our business. Therefore, shareholders can expect further acquisitions."
Analysts at house broker Peel Hunt said the price tag looks “very attractive” and “was helped by the vendor needing to complete quickly”.
“The addition of Cali should provide a strong platform in the US for further acquisitions, and also brings digital capabilities that can be incorporated elsewhere in the group,” they noted.
Shares rose 4% to 1,036p on Wednesday at the opening bell.