Luxury kitchens and stone flooring supplier Smallbone has become one of Europe's largest bespoke furniture manufacturers after clinching a deal to buy Mark Wilkinson Furniture.

Smallbone has agreed to buy MWF, which has a showroom in Leamington Spa, in a deal which could rise to £5.6 million.

The Wiltshire company, which plans to manage the MWF brand as a separate business, said immediate benefits will be derived by introducing its stone flooring products into the MWF sales offering.

"The directors believe that further margin improvements and overhead savings can be obtained from the enhanced purchasing power of the enlarged group," it said.

MWF manufactures bespoke kitchen, bedroom and bathroom furniture with eight directly operated showrooms in the UK and a network of dealerships in the US, UK, Russia and Europe.

The company which employs approximately 290 employees made pretax profits of £280,000 last year on the back of sales of £19.25 million.

Turning to current trading, Smallbone was upbeat saying its order book stood at just over £16.1 million at the end of May - 15 per cent ahead of 2004, and added that MWF's order book was also ahead of its year earlier period.

It said its showroom roll-out was progressing well, with one in Glasgow opening in July and a flagship New York showroom expected to launch in early 2006.

Meanwhile, the end of year re-launch programme for Smallbone Bedrooms and Bathrooms is well advanced while trading in the US for Paris Ceramics is significantly ahead of last year.

Smallbone has promoted part time finance director Gordon Montgomery to a full time role and said it will appoint Mark and Cynthia Wilkinson as executive directors on completion.

The two will become Smallbone's biggest shareholders, with a holding of approximately 8.3 per cent.

Charles Smallbone, chairman of Smallbone, said: "I am personally very excited by this deal which will create one of Europe's largest bespoke furniture manufacturers.

"Mark and I were partners 25 years ago at the very start of Smallbone and since then he has also done a fantastic job of building his own company up to the position it enjoys today.

"We are both ambitious about growing these two businesses and the combination of our skills will undoubtedly benefit our customers and shareholders alike."