LONDON, UK: Victoria PLC announced the further expansion of its existing North American distribution business with the acquisition of Cali Bamboo Holdings Inc. (Cali).
Total consideration paid was US$76.1 million (£55.1m) and was funded entirely from the Group’s cash balances. In addition, Cali had approximately US$27.8 million (£20.1m) of net debt, which was repaid on completion.
Cali Bamboo Holdings is an exceptionally high-growth US-based business that has achieved an organic CAGR of 17% for the past five years via its online B2C customer acquisition model, data-driven analytics, a high-touch consultative sales team, and direct delivery capability, alongside B2B channels.
The integration of Cali with Victoria’s existing business will create opportunities for value-creating revenue synergies by expanding Victoria’s US distribution, where the Group currently sells c. US$33 million of flooring each year.
However, very significantly, the acquisition also gives Victoria access to the intellectual property and online management experience of Cali, which the Group will leverage to partner with its key retailers to accelerate growth in its existing UK, European, and Australasian markets.
Established in 2004, Cali is a multi-channel US flooring distributor with 49.5% of revenue from direct to consumer and direct to contractor channels driven by the Cali website, 29.0% of revenue from speciality retailers (B2B), and 21.5% of revenue from consumers via national home centres.
This direct customer access, combined with Cali’s bespoke data analytics capabilities, enables informed decisions about new products and channel-specific marketing initiatives that allows Cali to constantly tune its channel and product mix to better address ever changing customer needs. The result has been consistent revenue and profitability growth in excess of industry averages and across economic cycles.
Like all companies acquired by Victoria, Cali will continue to operate with a high degree of autonomy under experienced and committed managers, led by CEO Renee Thomas Jacobs, whilst benefiting from access to an even wider range of products to support its rapid growth.
Acquisition of Cali is another step in Victoria’s strategy of growing its business with earnings accretive acquisitions, and then using available synergies to drive further increases in margin and revenue across the Group. The Board believes that Cali presents an excellent strategic fit with Victoria’s existing business and will have strong long term growth prospects as part of the Group.
Philippe Hamers, Group Chief Executive, commented: “Victoria has been successfully selling a significant amount of product into the US$29 billion – and growing – US market for many years. The acquisition of Cali represents a step-change for the Group presenting both revenue synergies alongside meaningful exposure to the fast-growing online sales channel. We will also be using the knowledge and online systems developed by Cali to partner with our existing key retailers in the UK, Europe, and Australia to accelerate our growth and earnings in these markets.
Cali has a very high-quality management team who are passionate about the business and the result is indisputable: it has been organically growing revenues at more than 17% annually for the last five years with strong operating cash conversion.”
Geoff Wilding, Executive Chairman, said: “Victoria has now invested a little over £160 million in the current financial year to add approximately £27 million of EBITDA to the Group. This is a significant acquisition for Victoria and helps towards our objective of increasing our commitment to North America where the practical support and deep sector experience of Koch Equity Development has proven invaluable.
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.”
Victoria PLc LON: VCP
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22 Jun, 4:35 pm GMT+1 ·Disclaimer
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