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Coventry to drill a deal with Nubco
Posted on Wednesday, 06 February 2019 14:21
In a move to establish itself as one of the leading industrial supply businesses in Tasmania, Coventry is buying Australian hardware retailer Nubco for AUD 36.00 million (USD 26.05 million).
The offer comprising AUD 34.20 million in cash and AUD 1.80 million of the buyer’s shares, will be funded from the proceeds of a capital increase and an existing debt facility.
Formed in 1983, Nubco claims to be the largest independent supplier of industrial and hardware products in Tasmania.
Headquartered in Devonport, it has seven stores across the state and in 2018 posted sales of AUD 39.40 million, with earnings before interest, taxes, depreciation and amortisation of AUD 6.00 million.
Its products include electric palm sanders, hammer drills, petrol walk-behind trowels, as well as heated jackets.
Through the acquisition, Coventry will increase its growth, and gain access to Nubco’s customer base via its presence in retail stores and trade shows across Tasmania.
A deal will also diversify its product range and add to its existing hardware divisions: Artia Cabinet Hardware Systems, Cooper Fluid Systems, Konnect Fastening Systems Australia and Konnect Fastening Systems New Zealand.
The acquisition is expected to close on 1st March 2019.
Established in 1936, Coventry distributes industrial supply products for the mining, construction and manufacturing sectors across 68 sites in Australia and New Zealand.
It has over 500 employees and posted revenue of AUD 168.74 million for the financial year ended 30th June 2018, up from AUD 151.03 million in the corresponding period of 2017.
Robert Bulluss, chief executive of Coventry, said: “The business [Nubco] is highly complementary to our Konnect Fasteners business and will lead to procurement costs for the whole group.
“The acquisition will add to the group’s profitability in FY19, allowing Coventry to accelerate the return to payment of dividends to shareholders and the utilisation of the company’s tax losses.”
According to Zephyr, the M&A database published by Bureau van Dijk, there were 53 deals targeting hardware stores announced worldwide in 2018.
In the largest of these, Netherlands-based Intergamma sold a minority stake to WP Carey and Intergamma Holding for EUR 510.00 million.
© Zephus Ltd