British merchanting group Wolseley - already a likely bidder for some or all of the Keyline business being sold off by CRH - didn't go out of its way to make any big splash about its first investment in Ireland, the takeover of Athlone group Heatmerchants for a rumoured near £20 million (€25.39 million).

This is the first corporate move in the Irish merchanting sector by a British group since Harrison & Crosfeld sold its Buckley's business to Heiton five years ago, but industry sources believe the Heatmerchants acquisition is just the beginning of an aggressive move by Wolseley to expand its business in Ireland.

Certainly, the Heatmerchants plumbing and tiles business in the midlands which has a £32 million turnover - trading as the intriguingly-named Tubs and Tiles - gives Wolseley a solid base as it casts its eyes around for expansion opportunities.

Interestingly enough, the share price of Grafton has got a bit of a lift in the past few days - from €16.80 (£13.23) to €17.50 - although it is not obvious whether this is due to the incursion by Wolseley or a broader recovery in the second-line sector in the wake of the share dealings in IWP and Unidare.

Grafton's plumbing business in Ireland trades as Plumb Centre, and Wolseley's business in Britain trades as Plumb Center, while Grafton has its Woodies chain which caters for the general public. Another potential attraction of Grafton is its chain of merchants in Britain - which while small compared with the giants - is still number six in the market.

Davy believes any further expansion by Wolesley in Ireland is likely to come through acquisition rather than by setting up greenfield operations. Greenfield operations are notoriously expensive to establish, and take time to build up. Buying an established business name is usually a better option for a group like Wolseley, wanting quickly to establish a presence.

Just like the rest of the second-line sector, Grafton and mirror-image Heiton have taken a battering as domestic investors have switched out of the sector - even though both stocks derive most of their earnings from the buoyant domestic construction industry. The low ratings the market has attached to these stocks must be attracting the attention of the big British merchanting groups which could bring their huge buying power to any acquired Irish business.

Don't be surprised to see more corporate moves in the Irish sector by the big British merchanting groups. If Wolseley sees value in Ireland, then it can be assumed its rivals in Britain will take a close look at what's available.