Western Australian window covering company Kresta Holdings Ltd has agreed terms to the $5 million purchase of Queensland-based Curtain Wonderland group.
Western Australian window covering company Kresta Holdings Ltd has agreed terms to the $5 million purchase of Queensland-based Curtain Wonderland group.
The acquisition is conditional on satisfactory completion of due diligence and finalisation of the assignment of leases of the properties occupied by Curtain Wonderland.
The acquisition is scheduled to be completed on July 3.
Curtain Wonderland has annual sales in excess of $33 million and operates through 20 stores in Queensland and regional New South Wales. It is a well established window covering business with a sound skill and technology based operation that should be easily integrated into the Kresta Group.
The purchase will be entirely debt-funded, and following the acquisition Kresta's debt will increase to $12 million and its debt-to-equity ratio will increase to 56 per cent.
Kresta managing director Tass Zorbas said the acquisition was the largest initiative taken by Kresta under its present management and would enhance the group's presence on the eastern seaboard and add significantly to the Kresta group's existing 56 stores.
THE FULL ASX ANNOUNCEMENT APPEARS BELOW.
KRESTA ACQUIRES CURTAIN WONDERLAND
Window covering company Kresta Holdings Limited (`Kresta') today announced that it
had agreed to acquire the Curtain Wonderland business based in Queensland.
The acquisition is conditional on satisfactory completion of due diligence and finalisation
of the assignment of leases of the properties occupied by Curtain Wonderland.
The Curtain Wonderland business has annual sales in excess of $33 million and
operates through 20 stores in Queensland and regional New South Wales. It is a well
established window covering business with a sound skill and technology based
operation that can be easily integrated into the Kresta Group. Curtain Wonderland has
excellent brand recognition and the potential to add significantly to the Kresta Group's
customer base.
The acquisition is scheduled to be completed on 3rd July 2006 and has a total acquisition
price of $5 million, which will be entirely debt-funded. Following the acquisition,
Kresta's debt will increase to $12 million and its debt-to-equity ratio will increase to 56%
from its present level of 40%.
It is anticipated that the acquisition will increase Kresta's projected EBITDA for 2006/07
by 14%.
Mr Tass Zorbas, Managing Director of Kresta Holdings Limited, said the acquisition,
which is the largest initiative taken by Kresta under its present management, will
enhance the Group's presence on the eastern seaboard and add significantly to the
Kresta Group's existing 56 stores.
"The acquisition is imperative for growth. This will enhance Kresta's standing in
Queensland and New South Wales and is aimed at capturing growth in those markets.
The Curtain Wonderland staff and management team will be a key resource to assist us
to pursue these growth opportunities and will continue to be employed in the business
following its acquisition by Kresta."
Mr Zorbas noted that `forecasted cash flows indicate good prospects for further growth of
the enlarged business and significant capacity to service the debt, which will maximize
benefits to Kresta shareholders.'
