Upholstered furniture retailer ScS Group PLC has recently agreed a £99.4m bid approach from Italian furniture retailer Poltronesofà SpA.
As reported, the offer values each ScS share at 280p, consisting of 270p per share cash and a 10p final dividend.
ScS said that the offer, which the ScS board unanimously recommends, is an “attractive valuation” and “recognises the quality” of the group.
As for Poltronesofà, what does this mean for the business and who are the firm behind the bid?
Poltronesofà has 167 stores in Italy, 106 stores in France and 27 further stores across Europe (15 in Belgium, nine in Switzerland, two in Cyprus and one in Malta).
Established in Reggio Emilia in 1995, Poltronesofà has become a leading sofa retailer in Italy and one of the leading sofa retailers in Europe. It designs and sells sofas and armchairs, as well as sofa beds and decorative accessories and retails them through its store network.
“Poltronesofà is widely recognised for its focus on a high-quality customer experience while offering Italian-manufactured products at affordable prices,” a supporting statement said in the acquisition announcement.
Its fabric sofas are produced in the Forli and Faenza district, whilst leather sofas are produced in the Puglia and Basilicata district. “Poltronesofà’s customers appreciate the extensive optionality for customisation, with the wide range of models and versions being customisable through Poltronesofà’s extensive range of upholsteries.
“This customer-centric offering is made available at a very convenient price range and also comes with a full team of well-trained and experienced professionals at the customer’s service who are available at any moment to assist throughout the purchase process.”
The acquiring company is Cerezzola Limited (BidCo), a wholly-owned subsidiary of Poltronesofà, which has bid for the entire issued and to be issued share capital of ScS. BidCo is a newly-incorporated English private limited company on 29 September 2023. BidCo has been formed at the direction of Poltronesofà for the purposes of implementing the acquisition.
The Poltronesofà Board believes there is a compelling strategic and financial rationale for undertaking the acquisition due to having followed the UK market and its key players for a significant amount of time, that both brands share many common values and principles.
“Poltronesofà admires ScS’s significant presence in the United Kingdom sofa and furniture market, as well as its strong brand position, and recognises that ScS is a strong business with a widespread and established base of 100 well-located and spacious showrooms in the United Kingdom.
“Moreover, ScS benefits from, a well-invested and growing digital e-commerce platform, industry-leading operational excellence, and resilient financial performance.”
Renzo Ricci, Chief Executive Officer of Poltronesofà, added: “As the next step of Poltronesofà’s pan-European expansion, the Acquisition represents the best opportunity for Poltronesofà to enter the United Kingdom market of upholstery products.
“Poltronesofà believes it is strategically very well placed to support ScS in the next stage of its development, and by building on the combined industry knowledge and experience and providing the necessary capital to accelerate ScS’s ambitions, the Acquisition will help ScS realise its full growth potential.”
Alan Smith, Non-Executive Chair of ScS, said: “This cash offer, which the ScS board unanimously recommends, comes at an attractive valuation. It recognises the quality of the ScS Group’s operations, its cash resources, and the progress accomplished under Steve Carson’s leadership via his refreshed strategy.”
“The ScS Board believes Poltronesofà will bring significant benefits to ScS through its broad industry expertise in addition to providing the necessary capital that would accelerate our current strategy, albeit in a private rather than public sphere.
“The Acquisition will enable ScS to continue as part of a broader, pan-European entity in pursuit of its strategy and position it for long-term success in the UK.”
