Bedding retailer Adairs (ASX:ADH)
has speeded up their purchase plan to fully acquire homewares and furniture supplier Mocka.
The ASX-listed home furnishings specialist currently owns a 65 per cent interest in the vendor. Adairs was originally scheduled to snap up the remaining stake in two deferred payments within the next two financial years. The total payment package for the full acquisition was initially estimated at $85 million.
The $773 million company has announced that it will move up their payment timeframe and purchase the remaining 35 per cent in one transaction for $45 million. The move will upgrade Adairs’ valuation of Mocka by $10 million to $95 million.
The linen seller has justified the decision by citing Mocka’s outperformance of business targets in recent times. Mocka’s encouraging progress has convinced Adairs’ management to advance the purchase to capitalise on the vendor’s “ scope for substantial further growth in Australia”
Adairs CEO Mark Ronan explained the rationale behind the move, “The early settlement of the deferred consideration enables the business to continue to invest in the short-term to realise the long-term potential that is beyond the time horizon of the founders.”
Shares in Adairs (ASX:ADH)
are trading 0.7 per cent higher at $4.60