Norcros to acquire RAP Plumbing Supplies Proprietary for ZAR215m.

Norcros, a market leading supplier of high quality and innovative bathroom and kitchen products is pleased to announce that its South African business, Norcros South Africa (Proprietary) Limited has entered into a conditional agreement to acquire 100% of the share capital of South African based RAP Plumbing Supplies (Proprietary) Limited, trading as House of Plumbing, a private company owned by the directors, a number of other employees and private investors for a total consideration of up to ZAR215m (£12.1m) on a debt and cash free and normalised working capital basis. House of Plumbing is a market leading supplier of specialist plumbing materials focused on the specification and commercial segments of the market supplying plumbing contractors, maintenance plumbers, and the public. Norcros has obtained unconditional approval from The Competition Commission of South Africa and that the transaction is expected to complete on 1 April 2019. Of the total consideration, ZAR172m (£9.7m) will be settled in cash on completion and up to a further ZAR43m (£2.4m) may be payable in two years via an earn out mechanism. The acquisition will be funded entirely from local cash resources and existing facilities. The Board expects the transaction to be earnings enhancing immediately. Commenting on the acquisition, Nick Kelsall, Group Chief Executive, said "I am excited by the acquisition of House of Plumbing as it will enhance our product offer to the important commercial and specification segments of the South African market where we have been successfully building our business. The acquisition also offers a number of opportunities to drive growth through geographical expansion and through our existing distribution channels. I look forward to working with Robin and his team to further develop and grow the business."