Historic carpet manufacturer Victoria has acquired the Whitestone Weavers group of companies in a deal worth up to £13.7 million.
The Hartlepool-based group comprises Whitestone Weavers, Carpet Line Direct, Gaskell Mackay Carpets, View Logistics and Thomas Witter Carpets.
The deal is for an initial cash consideration of £5.7 million and deferred cash consideration of £6.5 million payable in stages over the next three years.
Additional deferred cash consideration of up to £1.5 million will be payable to the vendors of Whitestone provided annual performance targets for increased EBITDA are achieved over a three-year period.
Kidderminster-based Victoria, which returned to the black last year, said today it had separately agreed to allow Whitestone management to reinvest £900,000 by subscribing for new shares.
Whitestone employs more than 100 people and designs, sells and distributes carpets across the UK.
Its product portfolio consists of woven and tufted carpets in both wool and synthetic yarns supplying the higher end domestic market.
All key senior management of Whitestone will remain with the business and it will continue to operate independently while benefiting from the synergies of an enlarged group.
For the financial year to July 2014, Whitestone generated turnover of £33.9 million.
Funding for the acquisition is being provided for by Victoria's bankers Barclays in the form of an additional £5 million facility.
Annual turnover of the enlarged group will be more than £200 million and it will operate from six manufacturing sites in the UK and two in Australia.
Executive chairman of listed Victoria Geoff Wilding said: "It is extremely well regarded within the industry and there are significant opportunities for operational synergies which will improve the service to our customers and enhance the returns to shareholders.
"This is Victoria's third major acquisition in just over a year following the acquisition of Westex and Abingdon Flooring."