LONDON: Likewise Group PLC, a British floor coverings distributor, said Wednesday it has bought a range of assets from Headlam Group PLC and HFD Ltd., both in administration, for 14.9 million pounds in cash, plus value-added tax.

The deal makes Likewise the largest floor coverings distributor in the U.K., the company said. It is an assets-only purchase, and Likewise is not acquiring any Headlam company.

Headlam, which supplied independent retailers and contractors, and HFD entered administration on Sept. 8. Joint administrators Will Wright, Chris Pole and Ryan Grant of Interpath Ltd. were appointed to oversee the process. Headlam’s shares had traded on the main market of the London Stock Exchange.

Likewise, which trades on London’s AIM market, said the purchase includes:

The 90,000-square-foot freehold Thatcham Distribution Centre, along with its operating assets and the inventory on site.
The businesses and assets of Crucial Trading and Concept Flooring, which has sites in West Bromwich and Stoke-on-Trent.
Headlam’s principal intellectual property.

About 110 employees at Thatcham, Crucial Trading and Concept Floors are expected to transfer to Likewise.

The company said it paid for the deal entirely from existing cash, with no new debt or equity raised. Likewise recently completed a 32.5 million-pound equity fundraising.

Likewise also agreed to help the administrators sell Headlam’s remaining inventory over nine months, so as not to disrupt the U.K. floor coverings market. Likewise will use its sales and distribution network, and proceeds will be shared with the administrators. The company is making an on-account payment of 2.3 million pounds, plus VAT, as part of that arrangement, and will occupy Headlam’s Coleshill site under a nine-month exclusive license.

Headlam generated unaudited revenue of about 188.8 million pounds in the six months ended June 30, according to a July 14 trading update. Likewise said separate revenue and profit figures for the acquired assets are not available because they were bought out of administration.

Likewise said the assets and inventory arrangement are not expected to make a material contribution to profit in the financial year ending Dec. 31, but should contribute positively in the following year. The company said the deal supports its goal of reaching 300 million pounds in revenue in the medium term. It plans to update investors on the integration at its full-year trading update in January.

“The Acquisition is a key milestone for the Group as it now becomes the leading distributor of floor coverings in the UK,” Likewise CEO Tony Brewer said. He added that the Thatcham site “adds significant capacity” to the company’s distribution network and said the company looks forward to working with the administrators to give customers and suppliers continuity.