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Grafton Group shortlisted as possible buyer for Irish BHT Group

Grafton Group has been identified as a possible buyer of ailing Tubs and Tiles owner BHT Group.

BHT — which, traditionally, would be second only to Grafton in the Irish builders’ merchants sector — went into examinership, last month, with debts of nearly €32m.

As well as the Tubs and Tiles brand, BHT — formerly known as the Wolseley Group — owns the Brooks, Tile Giant, Electric Merchants and Heat Merchants brands.

Weekend media reports suggested that KPMG — appointed examiner to BHT in mid-February — had arrived at a short-list of potential buyers for the business, with it apparently including Grafton and a management buyout team, as well as three other candidates.

Grafton declined to comment on the matter yesterday. However, the group’s finance director, Colm O’Nuallain, was asked directly about Tubs and Tiles earlier this month, when Grafton issued its own annual results. He seemed to suggest that the group would not be overly interested in acquiring the retail business, given the close proximity to many outlets of Grafton’s own main retail operation, Woodie’s DIY, but did not comment on the attractiveness of the overall BHT business.

Grafton’s latest results were relatively strong, but most of last year’s growth came from its British-based merchanting business.

Grafton has a relatively strong war chest of funds available, should it want to grow by acquisition, but it is more likely to use such money to lower its net debt from 226m to below the €200m mark by the end of this year.

Management has said, however, that the group is in a position to participate in consolidation in the builders merchants industry.

Regarding a potential move by Grafton for BHT, Bloxham Stockbrokers said: "Competition concerns would likely be the key hurdle for any bid from Grafton, given the overlap in the two builders’ merchants businesses."

Source : Geoff Percival – Irish Examiner

27 March 2012
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