Victoria to buy European tile maker Saloni for EUR96.7m

AIM-listed Victoria has agreed to buy European ceramic and porcelain tile maker Saloni for €96.7m (£86.2m).

The manufacturer and distributor of carpets, tiles, underlay and artificial grass said on Monday that the cash consideration will be satisfied in part through a placing of 7.3m new ordinary shares at 827p each, raising gross proceeds of around £60.5m. The balance of the consideration will be funded from a new banking facility provided by lenders HSBC and Barclays.

The acquisition of Saloni - whose main markets are in Spain and France - is expected to be "materially" accretive to earnings per share in the first full year of ownership.

For the year to the end of December 2017, the business generated audited net revenues of €106.3m and adjusted earnings before interest, taxes, depreciation and amortisation of €15.6m. For the 12 months ended 31 May 2018, Saloni generated unaudited adjusted EBITDA of €17.8m (£15.9m).

Chairman Geoff Wilding said: "We believe that Saloni is a high-quality addition to the Group. Notwithstanding its strong organic growth prospects, there are meaningful operational synergies with our existing Spanish ceramics company, which we will move quickly to realise. Even before these synergies, the acquisition of Saloni will be materially earnings accretive in the first full year of ownership and it also continues to increase the geographic diversity of our revenues and earnings."

Wilding added that post completion, more than 65% of Victoria's earnings will be generated from outside the UK, continuing the group's transformation into "a genuinely international" flooring business.

At 1250 BST, the shares were down 2.2% to 831p.