Victoria bags Australian carpet maker Quest

Floor coverings group Victoria Plc has acquired Australia-based rival Quest Carpet Manufacturers and Quest Carpet Manufacturers Unit Trust for up to a total of £16.4m.

The deal will constitute an initial cash consideration of around £11.5m and a deferred cash consideration of £4.9m.

Victoria, which manufactures, supplies and distributes 'design-led' carpets and floor coverings, said the deferred amount will be payable in instalments of £1.6m on the anniversary of completion for each of the next three years.

It added that the total consideration represents a multiple of a little under 5 times Quest’s normalised earnings before interest, taxes, depreciation and amortisation for the year ended 30 June 2015.

The acquisition, which is expected to be immediately earnings-enhancing for Victoria’s shareholders, is being funded in Australian dollars using Victoria's existing facilities with Barclays Bank and HSBC.

Quest is based in Dandenong near Melbourne and designs, sells and distributes premium quality carpets across Australia and New Zealand. For the financial year ended 30 June, Quest generated unaudited turnover of £28.1m.

Victoria’s chairman Geoff Wilding said: “We are delighted Victoria has been able to acquire Quest Carpets. It is an extremely well-run and growing business and it took some time to persuade the current owners to accept our offer.

“However Quest is highly complementary to our existing business in Australia and so, while we remained disciplined with our offer, I think the vendors would agree we were quite persistent in our pursuit.”

Later on Friday, Wilding sold a small portion of his stake in the company, with broker Cantor placing 1m of new shares at 1,117.5p per share to "help satisfy continuing institutional demand", meaning Wilding now holds 41.77%.

At 10:20, Victoria shares were up 1.9% at 1,139p.