Floorcoverings supplier Victoria (LON: VCP) is acquiring US distributor Internationa Wholesale Tile (IWT) for $28.5m (£24.9m). This will help AIM-quoted Victoria to sell more of its Europe produced tiles in the US.
There could be a further payment payable over the next four years, which is dependent on chieving growth and earnings targets. This will be capped.
Florida-based IWT distributes ceramic, stone, glass and vinyl tiles and revenues have been growing at an annual rate of 11.6% over the past decade. IWT’s warehouse is 85% utilised and Victoria has other warehouse capacity in the US.
In the year to March 2022, IWT generated sales of $63.2m and EBITDA of $7m. Most of IWT’s business is in Florida, which is growing at a faster rate than the US as a whole.
Peel Hunt is maintaining its 2022-23 forecast due to integration costs and has upgraded the following year’s earnings by 3%. The 2022-23 pre-tac profit is expected to be £78.3m, rising to £90.1m.
At 415.5p, Victoria is trading on nine times prospective 2022-23 earnings, falling to eight the following year.
