Grafton to raise €160m in US placing

Geoff Percival

Builders merchanting group Grafton is set to widen its funding sources to take in the US by way of a €160m-raising private placing.

The Dublin-based group, which also owns the Woodie’s DIY chain, will issue unsecured senior notes in the US private placement market next month, with 10 and 12-year maturities at an average annual coupon of 2.5%.

As of the end of last year, Grafton had committed banking facilities of around £528m (€592m), with about £315m drawn down, with an average maturity of four years. Investors and analysts welcomed the news.

Grafton’s share price rose by up to 2.38%.

“This placement will diversify the funding sources and extend the maturity profile. Overall, we view the US private placement as a sensible piece of business at an attractive rate,” said Goodbody analyst Robert Eason. Grafton is active in Ireland, the UK, the Netherlands and Belgium.

Earlier this year it said it would not be “constrained by geography” in its expansion plans and would be open to entering new markets in Europe through acquisition.

However, chief executive ruled out a near-term acquisition move in the US despite its attractiveness saying there was enough to focus on in Europe.

Grafton is due to publish first-half financial results next week.

Last month it said that sales for the first six months of the year jumped by 8.6% to €1.63bn, with its Irish merchanting business increasing 10% and its Woodie’s business increasing sales by nearly 16%.

Core UK merchanting sales increased nearly 7%.