REG - Card Factory PLC - Acquisition of Garven Holdings, LLC

Card FactoryAnnouncement

05/12/2024 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241205:nRSE8750Oa&default-theme=true

RNS Number : 8750O  Card Factory PLC  05 December 2024

5 December 2024

Card Factory plc ("cardfactory")

cardfactory to enter the US with the acquisition of Garven Holdings, LLC.

Entry into biggest global celebration occasions market marks an important
milestone in international growth ambitions.

 

cardfactory, the UK's leading specialist retailer of greeting cards, gifts
and celebration essentials, today announces that it has acquired the entire
issued share capital of Garven Holdings, LLC and its subsidiaries ("Garven").
Garven trades as Garven Design and Cadence Packaging and is a leader in the
design and wholesale of gifts and celebration essentials, based in Minnesota,
USA.

Strategic Rationale

In line with cardfactory's growth plan, this acquisition accelerates our
partnerships strategy in one of our key international target markets. It marks
cardfactory's physical entry into the US gifts and celebration essentials
market, which represents the biggest market globally at circa £70 billion in
total.

Garven has an established customer base of general and speciality retailers
which will allow cardfactory to further explore design and buying synergies,
alongside opportunities to introduce its own ranges into the US wholesale
market.

Chief Operating Officer, Anne Schulze and Chief Financial Officer, Walter
Jungbauer will continue to manage the Garven business.

Financial Consideration

The acquisition price of $25 million on a cash/debt free basis (subject to
customary closing adjustments) was paid in cash at Completion on 4 December
2024 and implies an EV/EBITDA multiple of c.5x. The transaction has been
funded from cardfactory's existing cash and debt facilities and the Company's
leverage position remains comfortably below our target maximum of 1.5x. Based
on current sales, the acquisition represents around 5% of cardfactory's
revenue, with negligible benefit to be realised in the remainder of FY25.

Trading Update

Trading in the second half to date has been in line with our expectations and
we have been encouraged by the start of the Christmas season. Our programme of
productivity and efficiency savings, as announced at our Interim results in
September 2024, also remains on track. Our expectations for the full year are
unchanged, albeit we are yet to trade through the peak Christmas trading
period. We will provide a further update to the market in our January trading
statement which is scheduled for 14 January 2025.

Darcy Willson-Rymer, cardfactory Chief Executive Officer, commented:

"The acquisition of Garven is an important strategic milestone in our
partnerships strategy. Together with our separate wholesale supply agreement
covering over 1,100 stores across the US, it establishes a physical presence
in the US market. Over a number of years, Garven has built a reputation as a
trusted brand known for its quality products and impressive design
capabilities, with Anne and Walter building an excellent customer proposition.
We are excited to welcome the Garven team to cardfactory and look forward to
building upon their existing commercial relationships, as well as forging new
ones.

"International partnerships are a key component of our growth strategy. This
acquisition is a key step in delivering the growth from partnerships as we
guided at our Capital Markets Update in May last year. Garven represents an
exciting opportunity for cardfactory to build scale in the world's biggest
celebration occasions market."

Enquiries

 

Card Factory
plc
via Teneo (below)

Darcy Willson-Rymer, Chief Executive Officer

Matthias Seeger, Chief Financial Officer

 

Teneo
                              +44 (0) 207 353
4200

James Macey White / Jo Blackshaw
                          cardfactory@teneo.com
(mailto:cardfactory@teneo.com)

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACQUSRKRSUUURAA