Grafton Group is to acquire Polvo BV and its 51 branches for €131 million.
Polvo BV is a leading Netherlands-based specialist in ironmongery, tools, ventilation systems, fixings and related products, wholesaling for construction and industry.
The Netherlands has been a reliably strong performer for Grafton, which owns Isero, a specialist distributor of tools, ironmongery and fixings over 28 stores. Grafton said Polvo is an excellent geographic fit with the Isero branch network, extending Grafton's coverage in the Southern, Western and Eastern regions of the Netherlands, where Isero is currently underrepresented, giving exposure to new product segments of the market and a more diversified customer base.
According to Grafton, the move gives it a market leadership position in the Netherlands specialist tools, fixings and ironmongery distribution market.
Grafton's combined Dutch businesses (which also include Breur Ceintuurbaan, Van der Winkel and Gunters en Meuser) will have over €300m revenue from 113 branches.
"This acquisition will complement our existing Isero business, increase our exposure to the attractive, fast growing Dutch market and support our strategy of creating a more balanced portfolio of businesses internationally," said Grafton CEO Gavin Slark. "Polvo is a long-established high quality business and brand that gives Grafton a unique opportunity to materially increase its scale and consolidate its market leadership position in The Netherlands."
Polvo reported revenue of €127.3 million and adjusted operating profit of €10.6 million for the year ended 31 December 2018. Gross assets were €64 million at 31 December 2018. The transaction is expected to complete before the end of June 2019, subject to consultation with the Polvo Works Councils, a condition that is customary for a transaction of this nature, and approval by the Dutch Competition Authority. Grafton will buy Polvo BV from the privately owned Pallieter Group, on a debt and cash-free basis.
