UK furniture retailer DFS is to acquire rival Sofology after confirming that contracts had been exchanged on an initial £25m deal.
The acquisition of its Warrington-based rival, which has 34 stores across the UK, will be on a debt-free, cash-free basis with a further consideration payable dependent on Sofology’s underlying EBITDA 12 months after the deal closes.
For Doncaster-based DFS, the deal continues the firm’s acquisition streak of smaller furniture retailers and adds to its portfolio of brands that includes Dwell and Sofa Workshop, and adds benefits of scale in areas such as the purchasing of advertising, interest-free-credit, upholstery and other services.
The existing senior management team will remain with Sofology and DFS have confirmed that there will be no store closures following the acquisition and that current plans to expand both brands’ footprints will continue as normal.
Ian Filby, CEO of DFS Furniture plc, commented: “While the UK furniture retail market continues to be very challenging, we remain focused on making strategic progress to strengthen our position in living room furniture.
“This Acquisition represents a clear opportunity for DFS to accelerate our proven strategy of broadening our appeal, generating substantial long-term returns for shareholders underpinned by well-understood synergies.
“Sofology’s distinctive market position is a good fit with our existing brands. Jason and his team should be congratulated for creating a fantastic and fast-growing business and I’m looking forward to working with Jason and the team as they continue to grow Sofology as part of the Group. “
Written by: Billy Wood
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