Building materials group Grafton is to acquire HSS Hire Ireland in a deal worth up to €31.6 million.
The company is acquiring the Irish business from HSS Hire Group, which is focusing its efforts on the UK.
The tool and equipment hire specialist has four branches and four customer distribution centres in the Republic. The company generated adjusted revenue of €31.9 million last year, and adjusted Ebita of €3.9 million.
It is expected to begin contributing to earnings in its first full financial year following acquisition.
Grafton said the addition of HSS Hire Ireland would complement Grafton’s existing hire business, allowing it to offer a comprehensive national hire service to its customers.
Once the acquisition is complete, the hire business will operate under Grafton’s Chadwicks brand. Grafton already operates the Sam Hire brand across the Chadwicks branch network, with the small plant and tool hire available from 23 locations.
The deal is on a cash and debt-free basis, and must be approved by competition regulators.
“We are pleased to have agreed to acquire HSS Hire Ireland which is a well-respected tool and equipment hire business and brand with a strong and experienced management team,” said Eric Born, chief executive of Grafton Group.
“This transaction is in line with Grafton’s strategy to strengthen our market positions in existing and adjacent markets and will broaden the offering of our Chadwicks business in the Republic of Ireland where we continue to see compelling opportunities for further growth.”
Broker Davy said the deal would add about 4 per cent to Grafton’s revenue base in its Irish distribution division, and an additional 1.7 per cent to its existing trading profit forecast for 2025 of £185 million.
“We consider the transaction as consistent with Grafton’s strategy to develop its proposition in existing and adjacent markets. Given the extent of Grafton’s net cash (£272 million at end-2024 excluding leases), the judicious deployment of its capital is welcome,” Davy analyst Flor O’Donoghue said in a note.
“More specifically, HSS Hire Ireland will position Grafton to continue to benefit from the mega-trends underpinning the Irish construction sector – a growing population and the need to invest in infrastructure; a chronic lack of new homes; and rising disposable income levels that are stimulating considerable housing RMI [repair, maintenance and improvement] investment.”
According to Grafton, the acquisition is “expected to deliver an attractive return on invested capital and to be earnings-enhancing in its first full financial year following acquisition”.
