WH Smith has sold Funky Pigeon to Card Factory in a deal worth £24m.

Card Factory said the acquisition would accelerate its digital strategy and provide the group with a platform for online growth – particularly in the direct-to-recipient card and attached gifting market.

Over the previous two financial years, Funky Pigeon on average generated around £32m in revenue per annum and £5m in earnings.

Card Factory revealed that it would fund the deal from draw down of up to £35m under the accordion facility provided by its banking syndicate, as part of the company’s current debt facilities.

WH Smith stated that the move to offload Funky Pigeon is consistent with its strategic focus on travel retail. The group has now described itself as “a pure play global travel retailer”, following the sale of its high street business to Modella Capital earlier this year.

Card Factory CEO, Darcy Willson-Rymer, said the acquisition marks “a significant step forward” in Card Factory’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,” Willson-Rymer added.

“Together, the enlarged customer base will benefit from a richer, more convenient customer proposition, combining the strength of our nationwide store estate and wider celebrations offer with Funky Pigeon's exceptional digital experience.

“Operational efficiencies, fulfilment synergies, and a unified technology platform will provide the data needed to develop deeper insights into the customer journey, enabling us to build a stronger, more integrated omnichannel business.”

A WH Smith statement revealed that the transaction is expected to complete “before the end of the calendar year”, subject to regulatory approvals.

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