Cardfactory has agreed a deal to buy FunkyPigeon.com, the online personalised card and gifting business, from WH Smith for £24m.
The greetings card chain stated that the acquisition, which includes a standalone operation in Bristol and Guernsey, supports its digital and omnichannel strategy, making it the UK’s second-largest online card and gift retailer.
Funky Pigeon has generated annual revenue of around £32m over the last two years and EBITDA of £5m.
Darcy Willson-Rymer, the Chief Executive of Card Factory, commented: “This acquisition marks a significant step forward in Cardfactory’s strategy to build a scaled, competitive digital presence in the celebration occasions market.
“It brings a high-quality platform and proven technology, accelerating our ability to compete in the direct-to-recipient card and gifting segment, so supporting our ambition to become the leading omnichannel retailer in our sector.”
Once the deal receives regulatory clearance, Card Factory expects to extract at least £5m of annual synergy benefits by its 2027 financial year through integration of technology platforms and optimisation of manufacturing and fulfilment operations, making the deal earnings-enhancing in that year.
WH Smith is selling Funky Pigeon following a strategic review and the earlier sale of its high street business to Modella Capital. The company stated that the sale fits with its focus on travel retail, describing itself as a “pure play global travel retailer” targeting growth opportunities in key markets.
Alongside the acquisition announcement, Card Factory said its expectations for mid-to-high single-digit sales and adjusted pre-tax profit growth in its current financial year remain unchanged. Group sales for the five months to 30 June increased by “mid-single digits” year-on-year.
