British travel retailer WH Smith has finalised the sale of its online personalised greeting cards business, Funky Pigeon, to UK-based retailer Card Factory for £24m ($32.1m) in cash.
This marks the completion of WH Smith's transformation into a “pure play global travel retailer”, aimed at capitalising on growth opportunities and enhancing shareholder value.
Card Factory CEO Darcy Willson-Rymer stated: "This acquisition represents a key milestone in delivering our strategic ambition to build a scaled and competitive digital presence in the celebration occasions market.
“We welcome our new Funky Pigeon colleagues into the group and look forward to working together to accelerate our growth in the direct-to-recipient card and gifting segment, bringing together Funky Pigeon's high-quality technology platform and digital expertise with our strong store estate and broader celebrations offer".
The sale is based on an enterprise value of £26m, with WH Smith expecting to net £21m in cash after deducting transaction expenses. These proceeds will contribute to reducing the company's debt.
Card Factory anticipates the acquisition to be earnings-enhancing in the financial year ending 31 January 2027, with synergy benefits projected to surpass £5m.
The benefits are expected to stem from improved manufacturing and fulfilment processes, technology platforms and product offerings.
Funky Pigeon's established online presence, backed by its teams in Bristol and Guernsey, has reported annual revenues of £32m and earnings before interest, taxation, depreciation and amortisation of £5m for the previous two financial years.
Card Factory's strategy includes leveraging Funky Pigeon's digital platform to enhance its omnichannel capabilities and attract its 24 million unique in-store customers to a stronger online market presence in celebration occasions.
Card Factory's digital strategy also involves improving the online customer experience and expanding the in-store party and celebrations range through an integrated omnichannel approach.
The integration of Funky Pigeon's tech platform is expected to drive operational efficiencies and elevate the customer experience for Card Factory's UK and Ireland operations.
