Nick Scali (ASX: $NCK) announces acquisition of Fabb Furniture and equity raising

Nick Scali Limited (ASX: $NCK) has announced its proposed acquisition of 100% of the shares in Anglia Home Furnishings Limited t/a Fabb Furniture (AHFL). The acquisition will be accompanied by a $46.0 million fully underwritten placement of new fully paid ordinary shares to institutional investors in certain jurisdictions, a $4.0 million non-underwritten conditional placement to Anthony Scali, CEO and Managing Director of the Company, and a non-underwritten offer of new fully paid ordinary shares to eligible Nick Scali shareholders in Australia and New Zealand under a share purchase plan. The acquisition and equity raising are aimed at expanding Nick Scali's presence in the UK market and strengthening its position in the furniture retail industry.

Executive Commentary

The presentation has been prepared to outline the proposed acquisition of Fabb Furniture and the accompanying equity raising. The acquisition of Fabb Furniture presents a unique opportunity for Nick Scali to establish its brand at scale in the UK market. The strategic rationale behind this move is to tap into the large and attractive UK furniture market and provide customers with a quality and value product offer. The management team at Fabb Furniture brings deep operational experience and is committed to supporting Nick Scali's growth strategy in the UK.

Summary of Acquisition and Outlook

The acquisition of Fabb Furniture and the equity raising signify Nick Scali's strategic move to enter the UK market and expand its footprint. The company aims to leverage its core capabilities across supply chain, procurement, and sourcing to boost profitability and achieve run-rate profitability within 18 months. With a focus on improving the customer in-store experience and introducing a differentiated product range, Nick Scali is poised to drive profitable growth in the medium term. The outlook for the combined group includes returning the UK business to profitability, temporary increase in losses during the transition period, and long-term prospects for sustainable growth in the UK market.