Builders merchant group Lords Group Trading has signed an exclusivity agreement for the potential acquisition of a Buildbase branch in Sudbury, Suffolk, which it plans to bring into its Hevey Building Supplies Limited subsidiary.
The sale of the branch follows Huws Gray’s acquisition of Buildbase and Grafton Group’s other traditional merchanting businesses, the sell-off of which was a condition imposed by the Competition and Markets Authority.
Under the agreement, Hevey has been provided with exclusivity until 31 March 2022 in relation to its potential acquisition of the Sudbury branch, which generated revenues of £5.1 million in the year to 31 December 2021.
The transaction is expected to offer synergies for the Sudbury branch and the wider Lords Merchanting division across product range, acquired customers and digital presence, while also further enhancing Hevey’s growing East of England presence.
While the acquisition remains subject to agreement between the parties, it is envisaged that it will see all employees of the Sudbury branch transferred into the employment of the Group. The total consideration, of not more than £2.2 million, will be met from the Company’s existing cash resources.
Shanker Patel, Chief Executive Officer of Lords, said: “The proposed acquisition of GMGB’s timber & building materials business is another strong statement for Lords as we continue to deliver the Group’s M&A strategy set out at IPO.
“The potential acquisition will, if completed, further diversify our offering to existing customers and will offer significant synergies with our Merchanting division.”