LONDON, UK: Likewise Group (LON:LIKE) has entered into a conditional agreement to acquire the entire issued share capital of Valley Wholesale Carpets, a UK-based distributor and wholesaler of carpets, for a maximum consideration of £30.0 million, including approximately £10.0 million of cash within Valley Wholesale Carpets.

This comprises initial consideration of £24.0 million which is payable at or shortly after Acquisition Completion, deferred consideration of £1.0 million and the issue of 5.0 million Ordinary Shares in Likewise.

If the 5.0 million Ordinary Shares are valued at less than £5.0 million on the second anniversary of Acquisition Completion, then the shortfall will be settled in cash.

Likewise Group intends to finance £14.0 million of the Cash Consideration due on Acquisition Completion via its existing cash reserves and a conditional Firm Placing of new Ordinary Shares to raise £12.0 million and a conditional Clawback Placing to raise £2.0 million, subject to clawback under the Open Offer, both at a price of 35 pence per Ordinary Share with institutional and other investors.

The balance of approximately £10.0 million of the Cash Consideration will be funded by the acquired Valley Wholesale Carpets cash reserves on Acquisition Completion.

Likewise Group will also issue the Consideration Shares, being 5.0 million Ordinary Shares, to the Valley Wholesale Carpets Vendors. The Consideration Shares are underpinned by a £5.0 million valuation on the second anniversary of Acquisition Completion, such that, should the Consideration Shares be valued at less than £5.0 million on that date, the Company will pay the Valley Wholesale Carpets Vendors the difference in cash.

On the first anniversary of Acquisition Completion, the Valley Wholesale Carpets Vendors will receive the Deferred Consideration, being £1.0 million, in cash. The Deferred Consideration is not conditional.

Completion of the Acquisition is conditional upon Admission, which in turn, is conditional on the passing of certain Resolutions to be proposed at a General Meeting authorising the Company to allot the Placing Shares. If the condition to the Acquisition is not satisfied by 28 February 2022, the Acquisition will not proceed.

Tony Brewer, Chief Executive of Likewise Group plc, said: “The Likewise Team have made significant progress over the last eighteen months and the acquisition of Valley Wholesale Carpets is a major additional step forward in the aspirations of Likewise to develop a meaningful Flooring Distribution Business throughout the UK.

“Many thanks to our Management and Staff for their contribution and efforts in addition to the support of our Suppliers, Customers and Shareholders to enable the development of Likewise to date and we look forward to an exciting future.

“We also welcome the Management and Staff of Valley Wholesale Carpets and whilst being an autonomous business it will very much form part of Likewise and our future. We also give our best wishes to Stephen, David, Kate and the Mitchell family for the future.”

Likewise is a distributor of residential and commercial floorings, mats and rugs to retailers and contractors through its seven distribution centres in Glasgow, Newcastle, Leeds, Manchester, Birmingham, Sudbury and Peckham.

Valley Wholesale Carpets, founded in 1982, is a distributor and wholesaler of carpets to independent retailers across the UK. It has a strong presence in the South East of England and the Midlands, with two principal distribution centres in Erith and Derby.