Grafton to acquire Netherlands-based Polvo for €131m

Irish builders' merchanting and DIY company Grafton Group has agreed to acquire Netherlands-based Polvo for €131 million.

The deal, which is on a debt and cash free basis, will extend Grafton's coverage in the southern, western and eastern regions of the Netherlands. The price tag includes €15 million for nine freehold properties, and will be funded from the group's cash resources and loan facilities.

Polvo is one of the top businesses in the specialist ironmongery, tools, ventilation systems, fixings and related products market in the Netherlands. The company has 51 branches, and the acquisition will fit with Grafton’s existing Isero network, which the Irish company acquired in November 2015.

The move will also bring new product segments of the market to Grafton, and diversify its customer base.

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In the year ended December 31st, 2018, Polvo reported revenue of €127.3 million and adjusted operating profit of €10.6 million for the year. It had gross assets of €64 million. The combined business will have revenues in excess of €300 million and trade from 113 branches.

The deal is expected to be completed by the end of June, and is subject to consultation with the Polvo Works Councils and approval by the Dutch competition authority.

“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,” said Gavin Slark, Grafton’s chief executive. “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 is headquartered in Dublin but its shares are listed in London. Its shares were up 2.6 per cent in early trading on Thursday to 839.5 pence, with its market capitalisation just shy of £2 billion (€2.3 billion).

The company has operations in Ireland, Britain, Belgium and the Netherlands. In the Republic, it trades under the Chadwicks, Heiton Buckley and Panelling Centre merchanting brands, and owns the Woodie’s DIY retail chain.