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