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(Alliance News) - Hornby PLC on Friday said it acquired a 25% share in Warlord Games Ltd for around GBP1.3 million, while it extended the term and amount of its existing credit facility.
The Margate-headquartered toy manufacturing company said the purchase of a GBP1.3 million stake in Warlord also entails the option to acquire a majority stake on or around the second anniversary of this initial acquisition.
From here, Hornby can then acquire any remaining shares in Warlord on future anniversaries.
Warlord was founded in 2007 by two former Games Workshop employees, Hornby said, and is "now one of the world's leading producers of" historical tabletop wargames, miniatures and accessories.
Hornby said Warlord manufactures primarily in the UK and sells to "over 600 distributors and stores around the world via their sales teams in the UK, Europe and the Americas".
Warlord will continue to be managed by its existing directors, Hornby said, believing its minority stake in Warlord "creates a number of opportunities to accelerate growth of the business further still".
"We are absolutely delighted to be able to join forces with Warlord Games, whose business we have always admired," said Hornby Chief Executive Officer Olly Raeburn.
"We very much look forward to working with the team there to maximise the potential of the business and use their significant experience and expertise for the benefit of the wider group."
Warlord Founder & CEO John Stallard added: "We are very much looking forward to working closely with Hornby as we have been big fans for many years. We see this as a huge opportunity to continue to build Warlord long into the future, as well as to contribute in any way we can to the future success of Hornby and its stable of iconic brands as there are innumerable opportunities and synergies in sales, marketing and production."
Hornby said the acquisition was being funded by an increase in the amount of its loan with its lender Phoenix UK Fund Ltd.
Also on Friday, Hornby said Phoenix UK Fund agreed an extension to its existing secured credit facility to GBP11 million from GBP9 million.
Hornby and Phoenix UK Fund also agreed to extend the maturity date of the facility by 12 months to December 31, 2024.
Other than the extension to the loan term and amount, Hornby said the terms of the facility remain unchanged. All advances made under the facility become due and payable in December 2024 with an interest rate of 5% plus sterling overnight index average on funds drawn, alongside the higher of 1% or SONIA on undrawn funds.
Hornby said it will have the option to draw down on these funds to capitalise on the positive momentum in the business and increase investment in our future development plans, alongside funding its stake in Warlord.
Shares in Hornby were flat at 17.00 pence each in London on Friday early afternoon.
By Greg Rosenvinge, Alliance News reporter
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