Plumbing and bathroom products supplier Tradelink acquired by Blackfriars Corporation
Fletcher Building has agreed to sell its plumbing and bathroom supplies business, Tradelink, to Metals Manufacturers, a subsidiary of US-based Blackfriars Corporation.
Transaction snapshot
Deal value: Between $150 million to $175 million
Deal multiples: ~0.21 - 0.25x revenue
Deal type: Acquisition
Investors: Metals Manufacturers, a subsidiary of Blackfriars Corporation (controlled by the Colburn family)
Metals Manufacturers outbid local turnaround specialists Anchorage Capital Partners and Allegro Funds in the early stages of the auction. The final round saw competition from Mesh & Bar, a reinforced steel distributor.
The Colburn family, with an estimated fortune of $1.8 billion, owns Metals Manufacturers. This local trade wholesale distribution business, founded in 1916, supplies electrical, communications, data, solar, lighting, and related products across Australia. The acquisition of Tradelink signals an expansion into bathroom products.
The sale is expected to provide a boost for Fletcher's acting CEO, Nick Traber, ahead of the company's 2024 financial year results presentation on 21 August. Tradelink posted revenues of more than $700m last financial year.
Fletcher Building's shares have dropped 46% on the ASX over the past 12 months. Investors, including Allan Gray, had supported the plan to divest Tradelink.
The company, which owns brands such as Laminex, Stramit, Iplex, and Oliveri, reported a net loss of NZ$120 million for the December half. This result led to the departure of CEO Ross Taylor and chairman Bruce Hassall.
Tradelink had been underperforming, particularly compared to ASX-listed rival Reece Group. Its carrying value was written down by NZ$122 million before the divestment.
