WOODIES DIY company, Grafton Group, has expanded its plumbing and builders merchants' business through the acquisition of two British firms for £1.5 million.

The businesses, Bond & White and Smarts, have a combined turnover of £5 million sterling and assets of £1.1 million. It has paid a premium on the net assets, and goodwill will amount to some £400,000.

There will be a small dilution to earnings this year but Grafton's executive chairman, Mr Michael Chadwick, said it would be positive next year with a contribution of a "few thousand pounds".

Bond & White operates from three branches in north London and this is a turnaround situation". Two locations one of which is a 1.25 acre site on the main road in Highgate will continue to trade as Bond & White the third branch, in Finchley, will operate as a branch, of Bradleys, Grafton's British plumbing and heating business.

Established in the last century, Bond & White had a turnover of £3 million last year. It could lose around £40,000 this year as a result of an integration programme.

Smarts is a plumbing, heating and bathroom specialist located in Cannock, near Birmingham. It had a turnover of £2 million and was nicely profitable" in 1995, according to Mr Chadwick. Profits are expected to be enhanced following savings on overheads and better buying power.

The acquisitions, said Mr Chadwick, would provide the group with an additional four locations in Britain. The acquisition of Bond & White had enabled the group to enter the builders merchants' market in London "from a particularly well located site".

Smarts extends the group's business into a new area and is expected to provide Bradleys with a further base for expansion.

The group was continuing to look for larger acquisitions, he added. The two latest, while small, provide "good opportunities".