Maiden listed company investment for Business Growth Fund

Alternative Investment Market-listed carpet business Victoria has become the first public company to be backed by the £2.5 billion bank-backed Business Growth Fund.

Having been initially set up using capital from Barclays, HSBC, Lloyds, RBS and Standard Chartered in 2011, the Business Growth Fund has struck out in an additional direction by adding a listed firm to its portfolio.

Carpet and floor coverings manufacturers, supplier and distributor Victoria has banked £10 million, the vast majority of which will go towards financing the acquisition of Abingdon Flooring.

The business, which is now more than 100 years-old, is based in Kidderminster and currently employs in excess of 600 people. Its goods can be found in Buckingham Palace and Balmoral Castle, with the business also holding a Royal Warrant.

With money in the bank, Victoria now plans to build what it describes as a ‘strong and sizeable flooring group’ – and is buying Abingdon to begin the process.

The BGF says that investing in listed companies is a ‘natural next step’ for the fund, as many companies listed still do not have enough access to long-term equity investment. The deal comes in the form of a loan note with a cash-paid coupon, and there is no capital repayment for the first five years. BGF will then be repaid over the following three years, and holds an option to buy more equity in Victoria later.

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Victoria executive chairman Geoff Wilding believes that the Abingdon purchase is the second ‘significant’ step forward for Victoria, after its acquisition of Westex in December 2013.

‘By integrating Abingdon into the business, we anticipate accelerating Victoria’s growth by enhancing its combined offering and reach across the UK,’ he adds.

‘Overall, when added to our existing operations the two acquisitions have together substantially increased the scale, breadth and reach of Victoria’s offering and are expected to be immediately earnings enhancing.’

Victoria will be paying £7.655 million for Abingdon, which itself has facilities in South Wales, Kidderminster and Yorkshire and a staff count of 500. For the financial year ending 31 March 2014, Abington recorded turnover of £75.1 million.

Stephen Welton, CEO at the BGF, says that AIM represents an opportunity for the fund to ‘materially extend’ its addressable market and gain access to a broader range of growing companies.

‘Using BGF’s exiting quick and efficient funding process we have invested £10 million of growth capital to support a high quality acquisition platform managed by an excellent team,’ Welton adds.

Hunter Ruthven

Hunter Ruthven

Hunter was the Editor for from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

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