#vcp Meeting notes originally published on the 23/10.
From Kidderminster to Wichita and back. Koch Equity Development are to invest £175m of convertible preferred equity capital into Victoria PLC to enable the PLC ‘to move quickly and decisively’ on the many flooring (ceramic focused) acquisition opportunities that CV-19 has potentially produced (piled up) up as many owners review the business assets with family members. The American money arrives in tranches.
Victoria PLC had final results a few months ago with the CEO highlighting the rapid return of customer demand and his desire to push on and expand the company, picking up quality operators who have had a hard time dealing with covid. The marketplace is dominated by family businesses. The Stockwatch UK results note of 8/8 picked up on the high optical debt level (spreadsheet analysts were worried) and the Invesco shareholding being an overhang. The share price reaction was dull yet retail custom was good. Last night’s surprise corporate announcements were discussed this morning, at the 930 analyst meeting and I was given a 121 with Geoff Wilding, the CEO shortly afterwards.
The closing market capitalisation was £535m, up 20% on the day. Last night’s corporate share restructuring needs general meeting shareholder approval.
The arrival of the Koch Brother family Equity Development vehicle as a 10% shareholders is ‘TRANSFORMATIONAL’ for the direction of the PLC, the CEO stated and he hopes to get board representation from them. The Victoria PLC board were interrogated at length ( ‘water boarded’) about the PLC's European expansion strategy. As mentioned in my August note, he was indeed seeing American investors just a rather big one but then Geoff is an ex investment banker with an impressive contact book. I wondered if the Koch family wanted to buy the whole PLC, something Geoff replied ‘not ready to sell’ but Koch has becoming a 10% shareholders (buying half of the Invesco stake at 350p) and providing permanent capital that can then convert into 10% of new equity in 6 years time ( plus warrants) makes them a corner stone investor with future take over options. Geoff said he had a number of proposals for expansion but Koch were long term industrial investors and gave his company market access (think American) . The European flooring market is worth €23bn.
Koch own ‘Stainmaster’ carpet products in America together with Invista, who supply…
