Heitons build portfolio with purchase

BUILDERS merchants Heiton Group plc have paid close to €4 million for the Waterford-based specialist plumbing and heating products supplier Paddy Power and Company.

Kilbarry-based Paddy Power was a family firm. Manager Paddy Power, is to run the business in the medium term following the sale. Heitons said no redundancies are planned among the 21 staff. No sale price was disclosed but Goodbody Stockbrokers believe it was between €3m and €5m.

Heiton said the acquisition forms part of the group’s strategy of “category and geographic expansion” of its trade division and consolidates the group’s position in the South East. NCB analyst John Sheehan said of the purchase: “The integration process will be straight forward, with buying synergies a primary focus.”

Heitons disclosed that in the year ended December 31, 2003, Paddy Power generated turnover of €8m and estimated net assets were €1m at that date.

“The acquisition will be funded from Heiton’s internal resources and is expected to be immediately earnings-enhancing,” the company said.

The latest set of accounts filed by Paddy Power in the company’s office shows pre-tax profits of €399,565 in the 12 months to December 2002, down from €729,097 in the preceding 14 months. The company had cash in hand of €1.2m at the end of 2002 and retained profits of €1,888,358.

The company was founded in 1986. Heiton Group chief executive Leo Martin said: “We are pleased to announce the acquisition of this successful business which firmly advances the position of Heiton Trade in the South East.”