Grafton to sell traditional merchanting business for £520m
Building materials distributor and DIY retailer Grafton said on Thursday that it has agreed to sell its traditional merchanting business in Great Britain to independent builders’ merchant Huws Gray for £520m.
The business being sold comprises the Buildbase, Civils & Lintels, PDM Buildbase, The Timber Group, Bathroom Distribution Group, Frontline and NDI brands. In the year to 31 December 2020, it reported revenue of £828.2m and adjusted operating profit of £18.8m.
Grafton said it will retain freehold properties with development potential that have a market value of around £25m.
The divestment is expected to close by the end of the first quarter of next year.
The decision to divest followed a comprehensive strategic review of the business which concluded that exiting this segment of the building materials distribution market would enable the group to optimise shareholder value.
Chief executive officer Gavin Slark 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."