Grafton Group, the builders' providers and DIY group, has acquired the business of EJ Thompson & Co, a plumbers merchant based in south-west England.

The £9.5 million sterling (€15.8 million) deal will be funded from existing sources.

"We expect the acquisition to be earnings enhancing for Grafton in the current year," said executive chairman Mr Michael Chadwick. "We are confident that the profitability of the business can be further improved" as part of the enlarged group.

Thompson trades from 21 branches. "The business fits well with our existing plumbers merchanting business, Plumbase, whose branches are mainly located in south and south-east England. The combined businesses will give extensive coverage in southern England," Grafton said.

Thompson generated a profit before tax of £1.25 million sterling on sales of £33.1 million in the year to June 30th, 1999. The acquired net assets of some £6.9 million are free of debt. The business, rather than the company, has been acquired because that is the way the vendors wanted the deal constructed.

Grafton has been expanding strongly in Britain where it now operates from more than 120 merchanting branches, predominantly in the south-east, south and midlands.