Merchanting group Grafton has sold its UK plumbing and heating arm, Plumbase.
On 1 October 2019 it sold the business, to Plumbing and Heating Investments Limited, for an enterprise value of £66.75 million. After allowing for adjustments for debt-like items and working capital, net cash proceeds of £60.7m were received on completion.
Plumbing and Heating Investments already owns GB Willbond, HPS and Plumbcity.
A Grafton statement said that the disposal of Plumbase is in line with the Group’s strategy of orientating towards higher returning businesses with good long-term growth prospects.
Plumbase generated sales of £257.8 million and operating profit of £6.0 million for the year ended 31 December 2018.
Gavin Slark, Chief Executive Officer of Grafton Group plc commented: “The sale of Plumbase to PHIL secures future opportunities for Plumbase, its employees and other stakeholders as part of an enlarged specialist plumbing and heating business. This transaction represents a very positive outcome for Grafton and enables us to continue to focus our capital and resources on attractive growth opportunities that generate appropriate returns for our shareholders.”