Travis Perkins have announced they have entered into an agreement to acquire the entire issued share capital of Tile Giant (Holdings) Ltd and all its subsidiary companies.
The acquisition establishes a seventh brand for the group and represents a move into another new distribution channel.
Travis Perkins will pay £12m for the tile retailer plus a further payment dependent upon future performance and expansion of the business over the period to December 2010.
Tile Giant trades from 29 outlets, 11 of which opened this year, with an average trading space of approximately 4,000 – 5,000sq ft. Sites are predominantly in the North of England and the Midlands. For the financial year ended 30 April 2007, Tile Giant generated pre-tax profits £300k and had gross assets of £4.3m.
As a significant part of the portfolio is still very new Travis Perkins expect earnings from the existing portfolio to grow significantly as the stores mature. “The acquisition is expected to be earnings neutral in the first year of ownership and enhancing thereafter,” said the company.
Travis Perkins chief operating officer John Carter said: ‘Under the entrepreneurial leadership of managing director Mo Iqbal, Tile Giant has grown rapidly and is set to become a major force in this attractive and growing market.
“The acquisition of Tile Giant provides potential for significant further growth in our business and branch network and is consistent with our strategy of investing in specific adjacent market segments. We welcome Mo and his management and staff into our group and look forward to further growth in the store base of Tile Giant in 2008 and beyond.”