Victoria has again raided its acquisition war chest, spending £60m on Edel Group to boost its artificial grass business.
Edel becomes its third artificial grass subsidiary after the 2017 purchases of Avalon (pictured) and GrassInc.
The group has paid £42.9m for Edel and taken on its £17.4m of debt.
In 2020 Edel generated EBITDA of £8.7m from sales of £41.1m, a rise of 7.4% as demand for artificial grass grew during the pandemic.
Victoria says European demand for artificial grass will grow by more than 10% a year over by the end of 2023.
Edel’s acquisition will allow Victoria to move about 4million sqm of annual production to Edel’s plants, increasing margin.
‘Both Edel and Victoria have extensive, but largely non-overlapping distribution networks across Europe and the directors believe there is a real opportunity to grow the combined revenues by collaboration on sales and distribution. The increased scale of the integrated business will reduce raw material costs and improve productivity at the factories, with a consequential improvement in operating margin,’ it adds.
‘Victoria’s 2017 investment in the premium artificial landscaping grass sector has been very successful and this acquisition represents an opportunity to create Europe’s largest and most profitable business in the sector. The addition of production facilities benefits our customers by enabling them to source locally in Europe, avoiding inflationary and disruptive imports from the Far East. Furthermore, the outlook for this product category is positive due to growing consumer acceptance and increasing demand for sustainable products that address climate change,’ says Philippe Hamers, Victoria group chief executive.
‘Victoria has, so far this financial year, invested a little over £90m to add approximately £17m of EBITDA to the group. 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 in the weeks and months ahead,’ says Geoff Wilding, Victoria executive chairman.
