Vitafoam, Vono finalize merger

After years of talks, Vitafoam Nigeria and Vono Products have finalized their merger. The two companies have obtained the statutory court order sanctioning their business combination. With the order of the Federal High Court, both companies have entered the concluding phase of the business combination.

Vita foam Nigeria and Vono Products had earlier secured approvals of their shareholders, Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) for this transaction.
At the conclusion of the merger process, Vono Products Plc will be dissolved and delisted from the NSE. The NSE at the weekend also indicated that it would suspend trading in the shares of Vono Products Plc as from today.

However, transactions will continue on Vitafoam Nigeria as it will become the surviving entity from the merger of the two companies.

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Stakeholders of Vitafoam Nigeria and Vono Products have rooted for the business combination, arguing that it would create better values for shareholders of the two companies and enhance the long-term competitiveness of the larger company.

Group Managing Director, Vitafoam Nigeria Plc, Mr. Taiwo Adeniyi said the merger of the two leading foam and bedding companies would lead to higher earnings and enhanced shareholder value.

He explained that the shareholders of both companies overwhelmingly endorsed the merger at the recent Extra Ordinary General Meeting, EGM . According to him, the shareholders appreciated the potential benefits of the merger such as economies of scale, cost savings and improved operational and administrative efficiencies among others.

The merger has been a five-year journey. “I can assure you that we at Vitafoam have always been thinking ahead. The issue of merger started about five years ago. Vitafoam is not just about mattresses only. We have many products for human comfort. As you all know, Vono is also a brand.

According to him, the enlarged company would have enhanced growth in size and profitability.

“If we produce foam and Vono produces furniture, they are complementary. It is a strategic decision for Vitafoam to have Vono as a subsidiary. As you are aware, we have other subsidiaries such as Vita bloom,
Vita green and Vitapur. Each of them produces distinct products. But they have something in common and this defines the unity of purpose,” Adeniyi said.

In corroboration, Vitafoam’s Group Executive Director, Corporate Services, Mr. Olatunji Anjorin described the merger as a vertical one as the furniture produced by Vono Products would complement Vitafoam’s foams. Anjorin explained that the consummated merger would put an end to past encumbrances militating against Vono’s growth, bring about more efficient expertise, shared value and improved technology.

He said the national spread of the group and its international operations have positioned it to weather tough operating environment and continue to deliver better values for shareholders.

“We are truly a national company. We have a full-fledged factory in Ikeja, Kano, Aba and Jos. We also have factories offshore. We operate in Sierra-Leone and Ghana strategically to position the Centre for inflow of Dollar in the long term because these are dollar based business environment. They may not be generating expected profit for now but they have high prospect .The key issue is that Vitafoam as a group has a very bright future and the shareholder value would be greatly enhanced. As a mark of competence. Vitafoam is ISO certified”, Adeniyi said.
Earlier on in 2011, the Managing Director of Vono Products Plc, Mrs. Titilola Bakare said the alliance became necessary because of the great patronage and tremendous market share Vono enjoyed in the 1960s and 70s. “About two decades ago, the fortunes of Vono worsened due to a combination of factors, including poor management, economic downturn in the country which reduced the purchasing power of consumers and government neglect of institutions. Whilst we have the Vono name heritage to leverage on, the company has not achieved the expected market share in the trade,” she said.
The then acting Managing Director, Vitafoam Nigeria Plc., Mr. Joel Ajiga said Vitafoam saw the opportunity to invest in Vono and took advantage of it. According to him, Vono had superior capability in the area of furniture-making while Vitafoam had the largest foam manufacturing and distribution network which would be of benefit to Vono in terms of timely delivery of its products in and outside the country.
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