Grafton Group plc – Agreement to Acquire Polvo BV
Combined Dutch businesses to have over €300m revenue from 113 branches
Grafton Group plc (“Grafton” or “the Group”), the merchanting and DIY Group with operations in the UK, Ireland, the Netherlands and Belgium, is pleased to announce that it has conditionally agreed to acquire Polvo BV (“Polvo”) from the privately owned Pallieter Group for €131 million on a debt and cash free basis.
Polvo is one of the top three leading businesses in the specialist ironmongery, tools, ventilation systems, fixings and related products market in the Netherlands. It trades from 51 branches and is an excellent geographic fit with the Group’s Isero branch network.
The acquisition will extend Grafton’s coverage in the Southern, Western and Eastern regions of the Netherlands, where Isero is currently underrepresented, giving exposure to new product segments of the market and a more diversified customer base. The combined business will have revenues in excess of €300 million and trade from 113 branches. Grafton will have a market leadership position in the Netherlands specialist tools, fixings and ironmongery distribution market.
Polvo reported revenue of €127.3 million and adjusted operating profit of €10.6 million for the year ended 31 December 2018. Gross assets were €64 million at 31 December 2018. The purchase consideration of €131m includes €15m for nine freehold properties and will be funded from the Group’s cash resources and loan facilities. The acquisition is expected to be earnings enhancing in its first full year of ownership.
The transaction is expected to complete before the end of June 2019, subject to consultation with the Polvo Works Councils, a condition that is customary for a transaction of this nature, and approval by the Dutch Competition Authority.
Commenting on the agreement, Gavin Slark, Chief Executive Officer of Grafton said today:
“This acquisition will complement our existing Isero business, increase our exposure to the attractive, fast growing Dutch market and support our strategy of creating a more balanced portfolio of businesses internationally. Polvo is a long-established high quality business and brand that gives Grafton a unique opportunity to materially increase its scale and consolidate its market leadership position in The Netherlands.”
Grafton Group plc + 353 1 216 0600
Gavin Slark, Chief Executive Officer
David Arnold, Chief Financial Officer
Murray + 353 1 498 0300
MHP Communications + 44 20 3128 8778
Grafton Group plc is an international distributor of building materials to trade customers and has leading regional or national positions in the merchanting markets in the UK, Ireland, the Netherlands and Belgium. Grafton is also the market leader in the DIY retailing market in Ireland and is the largest manufacturer of dry mortar in the UK.
In 2018, Grafton Group plc reported revenue of £2,952.7 million and adjusted operating profit of £194.5 million. At 31 December 2018, net debt was £53.1 million.
Grafton trades from circa 675 branches and has almost 13,000 colleagues. Its portfolio of brands include Selco, Buildbase, Plumbase, Leyland SDM, MacBlair and CPI EuroMix in the UK; Chadwicks, Heiton Buckley and Woodie’s in Ireland; Isero and Gunters en Meuser in the Netherlands and YouBuild and MPRO in Belgium.
Isero was acquired by Grafton in November 2015. Since then, Isero acquired Gunters en Meuser, the market leader in the Greater Amsterdam Area, and also completed a number of other acquisitions. Isero is the market leader in the tools, ironmongery and fixings market in the Netherlands and currently trades from 62 branches. In 2018, the Dutch business contributed revenue of £155.5 million and operating profit of £16.0 million, an operating profit margin of 10.3 per cent. It represented 5.3 per cent and 8.2 per cent of revenue and adjusted operating profit respectively of Grafton Group plc.
For further information visit www.graftonplc.com