LONDON (ShareCast) - (ShareCast News) - AIM-listed floor coverings manufacturer Victoria is to buy Australia's Dunlop Flooring for £20m (AU$34m).
The acquisition, which is expected be immediately and "significantly" earnings accretive, is anticipated to be completed during the first quarter of 2017.

The company is to buy Dunlop, an underlay and hard wood flooring manufacturer, from Pacific Brands, which is to be taken over by US-listed Hanesbrands, on a cash and debt free basis.

The AU$34m represents 5.7 times Dunlop's earnings before interest, tax, depreciation and amortisation (EBITDA).

Victoria's chairman Geoff Wilding, said: "Dunlop is another important and strategic acquisition for us, and one which reinforces our strategy of targeting earnings-enhancing acquisitions in addition to organic growth. It will make a positive contribution to Victoria's profits whilst diversifying our market exposure. Post-completion, nearly 30% of Victoria's earnings will come from Australia - a dynamic and growing market and a strong economy."

This acquisition builds on its September 2015 acquisition of UK underlay manufacturer, Interfloor, and the company's last acquisition in Australia, Melbourne-based Quest Carpets, which has been fully integrated.

Wilding added: "Our strategy of achieving scale through acquisitions and using that scale to extract genuine synergies continues to deliver value for the group and we look forward to developing the Dunlop business as part of Victoria."

The company said the acquisition will give it additional exposure to the Australian market as Victoria's like-for-like revenues for the country have grown more than 9% in the last six months.

For the year ended 30 June, Dunlop had revenue of AU$50.8m, EBITDA of AU$6m, and earnings before interest and tax (EBIT) of AU$4.9m.

On completion Victoria's net debt to EBITDA ratio will be less than two-times, which is within the company's acceptable level of debt.

Shares in Victoria were up 2.92% to 353p at 0924 GMT.

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