Bord na Mona has purchased the Suttons Group, a distributor of solid fuels and oil products, from IAWS for £5.2 million. Suttons had an operating profit of £806,000 last year.
It is based in Cork and has depots throughout the Munster region. It was bought by IAWS as part of the R&H Hall acquisition several years ago.
Bord na Mona said the purchase was in keeping with its strategic plan to develop the marketing and distribution network of its fuels division which manufactures briquettes and distributes a range of solid fuels.
Bord na Mona said that significant changes had been taking place in the residential heating market, regarding the mix of fuels which consumers were now buying.
"The decline in coal consumption has led to a rationalisation of the sector and the amalgamation of Bord na Mona fuels division and Suttons will strengthen both parties," the company said in a statement.
A Bord na Mona spokesman said that despite changes in the market, ona the company was making money out of it. Suttons was a profitable business which the company had been negotiating to buy for several months.
The state company said the geographic market covered by Suttons was largely complementary to Bord na Mona's fuels division and the merged entity would benefit from economies of scale and marketing strength.
Suttons, which employs 80 people, is the authorised Esso distributor in Munster and the west of Ireland, servicing the domestic, marine, commercial transport and lubricant markets. Bord na Mona said it hoped to further develop these markets.
Two years ago Bord na Mona bought CHL for £4.5 million. It said yesterday that this operation had been financially successful and had been integrated into the company's fuels division. Mr Philip Lynch, IAWS managing director, said the disposal of Suttons was in keeping with the company's strategy of focusing on its core earning stream.
Meanwhile, Esso also said yesterday that it had purchased the business and assets of Stafford Fuels (north East) Ltd, a solid fuel distributor which serves a small geographic area in the north-east of the country. That company has a turnover of around £5 million per year. The purchase price was not disclosed but is thought to be in the region of £750,000.
