Lords Group Trading (LORD ) has acquired a 90% interest in DH&P Trade Counters Holdings and DH&P HRP Holdings, together known as ‘DH&P’, for a total consideration of £9.3m.

In a separate statement, Lords announced that its subsidiary, Hevey Building Supplies, has acquired a Suffolk-based branch as it further expands its presence in the East of England.

DH&P Trade Counters Holdings is a leading plumbing heating merchant with a strong regional focus in Ipswich, Chelmsford, Southend, Benfleet and Colchester. As a national distributor of plumbing and heating spares, the DH&P HRP business services 400 customers. For the year to 30 July 2021, DH&P generated total revenues of £27.6m and underlying EBITDA of £2m.

Lords, which distributes building materials across the UK, said the former further extends the Group’s existing plumbing and heating network of nine branches represented under the Mr Central Heating brand while the latter’s operations align with the Group’s APP Wholesale division that distributes plumbing and heating products nationwide to 2,400 customers.

The remaining 10% interest in DH&P’s issued share capital will be retained equally by the business’ current vendors, who will remain in their management roles with the business.

Today’s acquisition has been funded from Lord’s existing resources and is expected to be immediately earnings. The consideration will be satisfied by an initial £8.93m in cash and a deferred cash element of £0.357m to be paid in 12 months, on a cash-free, debt-free basis.

In addition, simultaneous call and put options over the remaining 10% of DH&P’s issued share capital will be held by the Group and DH&P’s vendors, respectively, which will not be exercisable prior to 31 March 2025 and the price subject to DH&P’s EBITDA performance.

Shanker Patel, CEO of Lords, said: “We are delighted to announce this excellent extension of Lords’ plumbing and heating business. DH&P have built up a solid business and we are really excited to welcome the 46 DH&P employees to the Lords Group family.  

Importantly, the acquisition will be highly complementary to our existing Mr Central Heating and APP Wholesale businesses within the Plumbing and Heating division and will help to increase our customer base, broaden our product offering and enhance our UK geographic coverage.”

Today, Lord’s subsidiary, Hevey Building Supplies, has also acquired a Buildbase branch, from Grafton Merchanting GB, previously part of its timber and building materials business.

This acquisition will offer additional expansion for the branch, which is a single site located in Sudbury, and the wider Lords Merchanting division across product range, acquired customers and digital presence whilst also further enhancing Hevey’s growing East of England presence.

A total consideration of £2.2m will be met from existing cash resources. The Sudbury Branch reported revenues of £5.1m and adjusted EBITDA of £0.5m in the year to 31 December 2021.

The Acquisition will see all employees of the Sudbury Branch transferred into the employment of the Group while Hevey Building Supplies expands its presence into the East of England.

Addressing shareholders, Patel highlighted that today’s acquisition continues the delivery of the company’s M&A strategy set out at the time of its IPO whereby it will look to grow its regional presence through acquiring businesses that are leaders in their local markets.

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