Mitre 10, wholly-owned subsidiary of Metcash, has acquired the Home Timber & Hardware Group (HTH) from Woolworths for $165 million, funded through a combination of equity ($80 million) and debt ($85 million). The acquisition is unconditional and is expected to complete in early October.
“Both Mitre 10 and HTH are passionate about supporting independent retailers,” says Metcash CEO, Ian Morrice, in a statement to the ASX.
“The combination of the two businesses will mean that Metcash’s hardware business will have a turnover of $2 billion. This increased scale, together with the opportunity to realise significant efficiencies, will enable us to be more competitive and deliver a better outcome for both our hardware retailers and their customers.
“The interests and values of Mitre 10 and HTH are closely aligned. Our objective is to continue to build successful independent retailers and grow a vibrant independent hardware sector, for the long term.”
The acquisition will result in a combined hardware network of 1,800 stores generating $2 billion in sales. HTH has over 1,200 stores in its network and strong retail brands including Thrifty-Link, Hardings and Hudson Building Suppliers.
The national store network comprises 43 company-owned stores, 363 bannered independent stores and an additional 865 unbannered stores. These are supported by four distribution centres: two in NSW, one in both Victoria and WA.
Under the terms of agreement, Metcash will not acquire two loss-making stores or the Dandenong, Victoria, distribution centre, which is surplus to the requirements of the combined entity going forward.
This article first appeared on www.applianceretailer.com.au