Grafton acquires British outlets

Builders’ merchants group Grafton has expanded its asset base in Britain, through the acquisition for an undisclosed fee of English timber merchant Beaumont Forest Products.

Beaumont’s business — which has been operating for 27 years — covers three merchant outlets in the south of England at Ascot, High Wycombe and Hoddesdon. These will now be subsumed into Grafton’s ‘Buildbase’ division, which has become one of Britain’s fastest- growing builders’ merchants businesses.

It has 175 outlets in Britain, and it will be enhanced by specialist timber skills being brought to it by Beaumont’s inclusion.

Grafton will also expand Beaumont’s existing three outlets by including its own Hirebase and Electricbase equipment hiring and electrical equipment wholesale services at each.

“Bolt-on deals form a core part of the Grafton strategy in the UK. They add scale, cover geographic gaps and augment the group’s position as a leading operator in the sector,” said Flor O’Donoghue of Davy Stockbrokers.

He added that the Beaumont deal looks to be a good example of Grafton extending its market position in the UK in a low- risk manner.

This development comes just days before Grafton is due to update the market on recent trading activity. The Dublin-based and London-listed group is due to issue its latest interim management statement on Thursday.

Back in May — just prior to it agreeing a new €565m five-year credit facility with its main lenders, which should save the group around £3m (€3.78m) in annualised savings — Grafton said revenues in the first four months of 2014 were up by 13.5%, year-on-year, to £654m (€800m).

The merchanting side of the business represents 90% of Grafton’s total revenues, but the company has seen steady growth in all divisions — including its Woodie’s DIY-led retail arm — since the turn of the year.