Grafton Group completes acquisition of Netherlands’ Polvo

Deal was announced in April with a €131m price tag

Grafton Group chief executive Gavin Slark. Photograph: Nick Bradshaw

Grafton Group chief executive Gavin Slark. Photograph: Nick Bradshaw

 

Irish builders’ merchanting and DIY company Grafton Group said it has completed the acquisition of Netherlands-based Polvo.

The deal, which was announced in April, saw Grafton agree to pay €131 million for the company, which 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 deal 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. The move will also bring new product segments of the market to Grafton, and diversify its customer base.

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

Progress

“We consider Grafton’s acquisition of Polvo as an excellent use of the group’s capital,” Davy analyst Flor O’Donoghue said. “The business will complement and enhance Grafton’s footprint in the Netherlands, where it has enjoyed excellent progress in a short period of time.”

The Davy note said there was potential for Grafton to use its increased platform and scale to expand its trading margin in the Netherlands, which was 10.3 per cent last year.

Grafton is also open to doing further deals in the Netherlands, chief executive Gavin Slark said in May, although he stressed it was not limited by geography.

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.