GRAFTON GROUP PLC
13 October 1999
PROPOSED ACQUISITION OF
LATHAM TIMBER CENTRES (HOLDINGS) LIMITED
Grafton Group plc announces the proposed acquisition of Latham Timber Centres
(Holdings) Limited from James Latham plc. The company operates from four
locations in South-East England and had a turnover of Stg£13.7 million for the
year to 31 March 1999. The consideration, net of cash acquired with the
Company, is expected to be circa Stg£6.54 million. The acquisition will be
financed in cash from existing resources and is subject to the approval of
James Latham plc shareholders.
Latham Timber Centres' four branches are located in Milton Keynes,
Buckinghamshire; Braintree, Essex; Horsham, Sussex; and Luton, Bedfordshire.
The business is involved in the supply of timber and building materials.
Commenting on the proposed acquisition Michael Chadwick, Executive Chairman,
Grafton Group plc said:
'Latham Timber Centres' four branches are a good geographic fit with the
existing Buildbase branch network and provide opportunities to develop
Latham's traditional strengths and expertise in the distribution of timber
products, and to broaden the range of building materials sold. Adjusted
operating profits for the year to 31 March 1999 were Stg£439,000. We
anticipate that the integration of the business into the Group will lead to a
significant improvement in profitability due to operational efficiencies and
buying benefits.'
Profit before tax reported for the year ended 31 March 1999 was Stg£196,000.
The purchase price is Stg£7.94 million before deducting cash of Stg£1.4
million which is expected to form part of the net assets to be acquired. The
acquisition consideration is payable in cash on completion. The purchase
price is based on net assets at completion being not less than Stg£4.480
million. Goodwill arising on the acquisition will be Stg£3.460 million.
Commenting on the announcement, Peter Latham, Chairman and Managing Director,
Latham Timber Centres said: 'The proposed acquisition represents an excellent
opportunity for the business to be developed as part of a larger merchanting
Group that is actively participating in the ongoing consolidation in the UK
merchanting industry.'
Grafton Group has in recent years developed a strong presence in the UK where
it currently trades from over 100 locations, mainly in the South East and
Midlands. The UK currently accounts for over half of the Group's turnover.
In the half-year ended to 30 June 1999 UK turnover was Stg£101 million.
Grafton Group plc is a building supplies and DIY Group. The Group's main
activities are builders and plumbers merchanting, DIY retailing, plastic and
concrete products manufacturing in Ireland and the UK.
FOR REFERENCE: Michael Chadwick
Executive Chairman
Grafton Group plc
Telephone:(++353)(01)216 0600
7.00am-9.00am (++44)(0)7887 678555
Joe Murray
Murray Consultants
Telephone:(++353)(01)661 4666
Ginny Pulbrook
Citigate Dewe Rogerson
Telephone:(++44)(0171)282 2945
This statement is also available on our website www.graftonplc.com
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