In a bid to further grow its commercial business, Topps has paid £3.3million for 80% of the issued share capital of Strata Tiles Ltd, a supplier of tiles to the commercial market.
The deal also provides options to purchase the remaining 20% of the issued shares in Strata by 2021, which would cost Topps a further £2million, “subject to performance targets over a two-year period”.
Under the terms of the agreement, Strata founders Jonathan Wiles and Paul Wallis, who established the business in 2002, will remain with the company. Strata will be integrated into Topps Tile Group's Commercial business unit, established following the acquisition of Parkside Tiles in August 2017. The Strata brand will be retained.
Topps plans to retain the Strata brand, which is a recognised and respected name in commercial tile supply. The company, operates offices in Guildford and a showroom in Bermondsey and is a leading supplier of quality porcelain, polished concrete, mosaics, natural stone and technical stone tiles for commercial design projects, with a core customer base within the architecture and design community. Key market segments include transport, retail, building cladding projects, university buildings and residential apartment blocks.
Topps believes the acquisition of Strata will add greater scale to the group's “fast-growing commercial business, as it seeks to build a leading position in the commercial tile market”.
Topps Tiles CEO Matthew Williams said: “Our commercial business is already expanding at pace, with sales in the first half growing by around three times year on year. The acquisition of Strata will accelerate this expansion and demonstrates our commitment to building a commercial business of quality and scale. Strata is a well-regarded and well-run business with a strong brand; and we look forward to welcoming the Strata team into the Topps Group.”
Strata’s latest financials show a turnover of £4.8milliom for the year ended March 2018, with an unadjusted pre-tax profit of £700,000. The value of the gross assets that are the subject of the transaction is £1.5million.
The Topps board expects the acquisition of Strata to be accretive to earnings in the current year and beyond.