Howdens to Acquire DIY Kitchens for £390m

Highlights

• Proposed acquisition of the parent company of Ultima Furniture Systems Limited¹, trading as DIY Kitchens, for an enterprise value of £390m (on a cash and debt-free basis); £292.5m in cash and £97.5m in Howdens' shares
  
  
• DIY Kitchens is a high quality vertically integrated online kitchen business through which Howdens will be able to access, directly, non-trade consumers
  
  
• Transaction multiple of approximately 8.5x LTM EBITDA to March 2026. The transaction is expected to be immediately accretive to revenue, EBIT margin, and EPS with strong cash generation and returns above the cost of capital
  
  
• Howdens to retain a robust balance sheet, with no change to the previously announced £100m share buyback programme in 2026 or its future capital allocation priorities

Summary

Howdens today announces it has agreed to acquire the parent company of Ultima Furniture Systems Limited, which trades as DIY Kitchens, for an enterprise value of £390 million. DIY Kitchens is a vertically integrated kitchen business that sells its products exclusively online, principally to end-customers, particularly those looking to self-manage the purchase of their kitchen.

DIY Kitchens is a highly profitable and growing enterprise with a proven business model quite distinct from Howdens' own trade-only, full-service model, through which the Group will be able to access, directly, 'non-trade' consumers, thereby expanding its addressable customer base in the UK.  DIY Kitchens' online channel provides consumers with self-service planning, design and ordering tools and its model combines low selling overheads with made-to-order manufacturing and strong cash generation supported by customer prepayment.

Post completion DIY Kitchens will remain an online only business focused on non-trade customers and will be operated separately from Howdens' own much larger trade only business. Completion of the transaction remains subject to customary regulatory approvals.

Strategic rationale

1. DIY Kitchens is a successful business which will provide the Group with an additional route to market and expand its accessible customer base in the UK.
   
   § DIY Kitchens attracts customers who are motivated to plan and design their own kitchen from home, with control over the ordering process through an online platform.
   
   § This is supported by high quality, made-to-order product, combined with low overheads.
   
   § It has consistently delivered strong growth and impressive returns and is highly rated by its customers, with an 'Excellent' Trustpilot rating.
   
   
2. Like Howdens, DIY Kitchens is well invested, scalable and vertically integrated across its manufacturing and supply chain with excellent growth prospects.
   
   § Both businesses have strong manufacturing and supply operations. DIY Kitchens operates short production runs for a made-to-order offering, whereas Howdens manufactures to stock, with typically long production runs.
   
   § Self-manufactured product represents around 40% of COGS and product quality is also very high.
   
   § The online-only proposition is supported by two large destination showrooms where customers can see displays of product. A third showroom is currently under construction in Scotland.
   
   
3. On completion, the Group will comprise two of the best business models in the kitchen industry.
   
   § Both businesses are well placed to grow as each is focused on serving a distinct customer base with very different requirements:
   
   o Howdens: Builders trade with Howdens because of its end-to-end service offer from stock to design, which is dedicated solely to their needs. This includes confidential local pricing, backed by credit terms that help them manage their cash flow, and an in-stock proposition. There are 893 locations across the UK, which we see rising to 1,000 locations over time, staffed by depot teams, including designers, to support throughout the planning and installation process.
   
   o DIY Kitchens: will remain an online-only offer focused on non-trade end-customers, with a differentiated product range which is made-to-order and which we see being on display in a small number of destination showrooms nationwide over time.

Financial rationale

DIY Kitchens has delivered strong sales growth alongside attractive margins and cash generation, supported by customer prepayment, and by the business not offering consumer finance. In 2025, it generated revenue of £136m and EBIT of £37m (a 27% EBIT margin). It has achieved revenue growth of over 17% per annum over the past five years. The transaction includes freehold property assets (valued at around £55m). While DIY Kitchens will operate as a standalone business with its own infrastructure, we do see cost saving opportunities over time. These will be focused at least initially on areas where there is a common approach within raw materials, sourcing and machinery.

Transaction overview

The consideration of £390m will comprise of £292.5m of cash, which will be funded by Howdens' existing cash resources and a new £240m bank facility. Howdens will issue the seller² 12.7 million  new Howdens ordinary shares at a total value of £97.5m, based on the volume weighted average of its share price over the 5 days prior to the date of signing of 766 pence per share. The enterprise value represents a multiple of approximately 8.5x the last twelve months ("LTM") EBITDA for the period ended 31 March 2026.

Capital allocation and returns to shareholders

Howdens is a highly cash‑generative business with a disciplined approach to capital allocation and DIY Kitchens is similarly cash generative. Following completion of the acquisition, the Group will retain a robust balance sheet. Howdens expects to remain in a net cash position post the transaction. The Group will continue to prioritise organic growth, maintain a progressive dividend policy, and will look to return surplus capital to shareholders while the Group maintains a net cash position. The Group's existing dividend policy and the previously announced £100m share buyback programme for 2026 are unchanged.

Current trading

Howdens will announce its Half Year results on 23 July 2026. Year to date trading has continued to be in line with our expectations and we remain on track with the outlook for 2026.

Commenting on the transaction, Andrew Livingston, CEO of Howdens, said:

"Howdens' highly successful trade-only model is built around supporting solely trade customers with outstanding in-stock availability, expert local depot teams, and an end-to-end service from design through to delivery. The acquisition of DIY Kitchens, which will be operated on a standalone basis, adds a complementary very profitable, business to the Group, providing access to non-trade end customers through its direct online channel with self-service planning, design and ordering tools."

"DIY Kitchens shares many of the characteristics that underpin Howdens' success including well-invested manufacturing, strong vertical integration, scalable capabilities and a deep, well-embedded entrepreneurial culture.

"We are excited to welcome the DIY Kitchens team to Howdens. We have great respect for the innovative business model they have built, and we look forward to supporting the business's continued growth and investing behind its next phase of development." 

Source : Howdens

Image : Howdens

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