The deal is considered to be the biggest of its kind in the industry to date and is subject to customary regulatory approval by the Competition and Markets Authority.
Huws Gray has today (July 1) announced its agreement to acquire the GB merchanting businesses from Grafton Group, for an enterprise value of £520 million.
Huws Gray, one of the UK’s largest independent builders’ merchants, is controlled by equity funds managed by Blackstone. Grafton will retain freehold properties with development potential that have a market value of circa £25 million. This agreement follows the announcement in April 2021 of a strategic review of the business.
According to Grafton, the businesses included in the deal, which comprise approximately 200 merchant branches and 3,500 people, are Buildbase, Civils & Lintels, PDM Buildbase, The Timber Group, Bathroom Distribution Group, and the Frontline and NDI brands. Selco Builders Warehouse, as well as a number of UK-based specialist distribution and manufacturing brands, will remain within the Group.
Terry Owen, Founder and Chairman of Huws Gray, said: “We are thoroughly excited and feel extremely privileged to be able to acquire such a well-respected name in the industry. This has given us the opportunity to more than double our branch network and substantially increases our geographical footprint. We look forward to working alongside our new colleagues and continuing on our exciting journey.”
The deal is considered to be the biggest of its kind in the industry to date and is subject to customary regulatory approval by the Competition and Markets Authority. In 2020, the Group's UK merchanting division reported revenues of £828 million, with an operating profit of £18.8 million.
Until this process is complete, the businesses will continue to trade independently. This process is expected to close by the end of the first quarter of 2022.
Ian Northen, CEO of Huws Gray, added: “We look forward to meeting our new colleagues across the business at the earliest opportunity. Through this acquisition, by working together as one team, we will continue on our journey, with a clear focus to deliver the best service possible to all our customers, at the same time as creating opportunities for new and existing colleagues.”
Commenting on the divestment, Gavin Slark, Chief Executive Officer of Grafton, said: “The divestment secures future opportunities for all stakeholders as part of an enlarged general merchanting business.
“I would like to thank all our colleagues in the Business for their longstanding contribution to Grafton and wish them every success in the future. This is an attractive outcome for Grafton and is in line with our strategy of deploying our capital resources towards higher growth potential businesses offering superior returns.”
This article was updated on 05 July 2021.
