Grafton Group PLC
11 May 2000
GRAFTON GROUP PLC
ACQUIRES REGIONAL PLUMBERS MERCHANTING BUSINESS
Grafton Group plc announces the acquisition of the entire share capital of
Essex Heating Supplies Ltd, a successful regional plumbers merchant based in
East Anglia. The purchase consideration of Stg£13.1 million is being
satisfied by the payment of Stg£7.7 million in cash, funded from the Group's
existing resources, and the issue of Stg£5.4 million in loan notes. At
completion, net assets are expected to be Stg£6.35 million and net debt to be
circa. Stg£0.7 million. Goodwill arising in respect of this acquisition
amounts to Stg£6.75 million.
Essex trades from 19 branches located principally in Essex, Suffolk, Norfolk
and Cambridgeshire. Turnover for the year ended 25 December 1999 was Stg£36
million on which profit before tax of Stg£2.03 million was reported. The
acquisition is expected to be earnings enhancing in the current year.
Following the purchase of Thompsons, a 21-branch plumbers merchant in January
2000, Plumbase, the Group's UK Plumbers Merchanting business, gained a strong
presence in South West England which complemented its branch network in London
and Southern England. The Essex branches are an excellent fit with the
current Plumbase branch network.
Commenting on the acquisition, Michael Chadwick, Grafton Group plc, Executive
Chairman, said:
'The acquisition of Essex, a well managed and profitable business which enjoys
a strong position in its regional market place, represents another significant
step in the Group's strategy of expanding its Plumbers Merchanting business in
England. The doubling of the Plumbase network in the current year to 86
branches has greatly enhanced market coverage and enabled Plumbase, which now
has an annual turnover well in excess of Stg£100 million, to become the
leading regional player in this market. The acquisition provides
opportunities for the enlarged business to realise benefits of scale and also
provides a stronger platform for any further expansion opportunities which may
arise'.
Grafton Group has in recent years developed a strong presence in the UK
merchanting market and is now established as the fourth largest merchanting
group trading from over 140 locations.
The main activities of Grafton Group are builders and plumbers merchanting,
DIY retailing, plastic and concrete products manufacturing in Ireland and the
UK.
FOR REFERENCE:
Michael Chadwick Colm O Nuallain
Executive Chairman Finance Director
Grafton Group plc Grafton Group plc
Tel: (++353) (01) 216 0600
Joe Murray
Murray Consultants
Tel: (++353) (01) 661 4666
Ginny Pulbrook
Citigate Dewe Rogerson
Tel: (++44) (207) 638 9571
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