Building materials distributor Grafton Group is to sell its traditional merchanting business in Britain to builder merchant Huws Gray for an enterprise value of £520m.
Huws Gray is one of the UK's largest independent builders' merchants and is controlled by equity funds managed by Blackstone.
Grafton, which owns Woodies DIY and Chadwicks here, said today's deal follows its announcement in April of a strategic review of the business.
Grafton's UK traditional merchanting business comprises the Buildbase, Civils & Lintels, PDM Buildbase, The Timber Group, Bathroom Distribution Group, Frontline and NDI brands.
In the year to December 2020, it reported revenue of £828.2m and adjusted operating profit of £18.8m.
The deal will be notified to the UK Competition and Markets Authority.
Grafton said the divestment is expected to close by the end of the first quarter of 2022 and completion is not conditional on the outcome of the CMA process.
Grafton said it will continue to develop its very successful Selco Builders Warehouse branch network and its other specialist distribution and manufacturing businesses in the UK
Completion of today's deal will also enable Grafton to focus on its international development strategy which will be a key priority over the coming years, it added.
Gavin Slark, Grafton's chief executive, said the divestment secures future opportunities for all stakeholders as part of an enlarged general merchanting business.
"This is an attractive outcome for Grafton and is in line with our strategy of deploying our capital resources towards higher growth potential businesses offering superior returns," he added.
