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Victoria adds to Spanish operations

IberoVictoria has agreed to purchase a third Spanish ceramic flooring company.

The group is to buy porcelain ceramic flooring manufacturer Iberoalcorense.

For the year ended 31 December 2018, Ibero generated revenues of €30.9m (£28.3m) and adjusted EBITDA of €3.1m (£2.8m).

‘We have been successful at negotiating a very attractive price for Ibero with the initial consideration being less than 3x the last 12 months EBITDA and, including the maximum earn-out payment, it will still be under 5x EBITDA - before considering the benefits of the expected synergies. These payments will be funded entirely from Victoria's current cash balances and will not require any further borrowings. Post-completion, nearly 75% of Victoria's earnings will come from outside the UK - continuing our transformation into an international flooring business,’ says Geoff Wilding, Victoria chairman.

Operating from a site in Castellon, near Valencia, Ibero is strategically close to the group's existing Spanish ceramics manufacturers, Keraben and Saloni. Founded in 1958, it manufactures porcelain ceramic flooring, which is sold both domestically and internationally. It sells to a combination of wholesalers, retail groups, and independent stores throughout Continental Europe, North America, and the Middle East.

‘Ibero is a very high-quality manufacturer and is an excellent commercial fit with our existing Spanish ceramic operations and I am delighted that Victoria has secured this acquisition. In keeping with our acquisition criteria, Ibero is very well invested in terms of its manufacturing facilities and will be immediately earnings accretive and positively cash generative on completion,’ says Wilding.

‘In addition, there are also some material operational synergies with our existing Spanish businesses, which we will realise over the next 12 months. These synergies will not incur any meaningful exceptional costs.

‘It has been 12 months since our last acquisition, Ceramica Saloni, which has now been fully integrated within our Keraben operation and is contributing strongly to our performance with the realisation of material synergies. Our strategy of achieving scale through acquisitions and using that scale to extract operational synergies continues to deliver value for the group. With a strong management team in place in Spain, we look forward to developing the Ibero business as part of Victoria.’