Product category:
Builders Merchants
News Release from: Travis Perkins
Edited by the Buildingtalk Editorial
Team on 08 April 2008
Travis Perkins invests in Toolstation
Travis Perkins invest in Toolstation, a rapidly growing direct retailer of tools and building materials.
Travis Perkins has acquired 30% of Toolstation's equity from its founding shareholders for GBP5 million and will provide an initial loan of GBP7 million to allow Toolstation to repay its outstanding early stage loan capital Travis Perkins will then provide an additional loan facility to support the growth of Toolstation's business
This article was originally published on Buildingtalk on 20 Jul 2007 at 8.00am (UK)
Related stories
Travis Perkins opens first Renewable Energy Centre
Travis Perkins opens its first dedicated renewable energy centre in Chelmsford to support the trade in offering renewable energy products.
Hire takes steps in the right direction
U-Go Pak-Flat podiums for hire by the construction industry ensure compliance with 2005 Working at Height regulations.
This facility is expected to be drawn, up to a maximum of GBP30 million, by Toolstation over the next four years.
Drawings under this facility are subject to performance conditions related to progress against Toolstation's business plan and all loans will be provided under normal commercial terms.
Geoff Cooper, Travis Perkins' Chief Executive will join the board of Toolstation.
Further reading
Travis Perkins merchanting park makes UK debut
E Travis Perkins Group opened its first dedicated merchanting park in Edinburgh featuring separate branches for Travis Perkins, City Plumbing Supplies and CCF.
Travis Perkins renewable energies at EcoBuild
Travis Perkins plc bring the concept of its Renewable Energy and Eco Centres to its stand at EcoBuild 2008.
Leeds Company Builds On Its Success
ACS Stainless manufacture and supply a diverse range of stainless steel structural fixings for use in the construction industry.
A successful move to Leeds has created new jobs.
Travis Perkins has the right to purchase the remaining 70% of Toolstation's equity through an earn-out formula.
This gives Travis Perkins the right to acquire the outstanding equity of Toolstation after four years on a multiple of profits with payments in 2012 and 2014.
The present owners of Toolstation have the right to require Travis Perkins to acquire the outstanding 70% of its equity at these dates provided that profits are above a minimum threshold.
It is expected that over the next six years cash generated from trading will repay all drawings under the GBP30 million loan facility and will create a positive cash balance by the end of this period.
This balance will be retained within Toolstation Limited.
Toolstation's turnover in the last 12 months was GBP21.4 million, with EBITDA being breakeven for the same period.
Toolstation has gross assets of GBP12.0 million and, for the year ended 31 July 2007, recorded a loss before taxation of GBP0.3 million.
About Toolstation.
Toolstation was created by Mark Goddard-Watts, a founder of Screwfix, the largest direct selling operator in this market.
Mark and a number of former executives of Screwfix left that business after its acquisition by a chain retailer, and Toolstation was subsequently launched in 2003.
Toolstation sells a wide range of tools, fixings, hardware, electrical and plumbing and heating materials to retail and trade customers throughout the United Kingdom and through a franchised operation in the Netherlands.
All products are included in its catalogue and are in stock and available online (www.toolstation.com), via its UK-based telephone call centre and through all of its trade counters at very high levels of product availability.
Customer orders placed online and by telephone before 5.00pm are dispatched for delivery next business day.
Toolstation's facilities comprise a main distribution warehouse with trade counter in Bridgwater, Somerset and ten more trade counters located across the UK.
Toolstation plans to continue its successful strategy of branch network expansion, with the aim of operating from at least 80 trade counters within the next five years.
Toolstation currently employs 244 people.
Opportunity.
Travis Perkins will use its buying scale, global sourcing capabilities, supply chain facilities and property expertise with the aim of accelerating Toolstation's rate of growth.
Through this investment Travis Perkins has also acquired the right to use Toolstation's ecommerce, warehousing and fulfilment software for direct selling of Travis Perkins' existing merchanting and retailing brands.
Travis Perkins has entered into a software and support contract with Owtanet, a technology services company related to Toolstation, to assist with implementation of these technologies.
Geoff Cooper, Chief Executive of Travis Perkins said; "This investment represents a significant advance in the development of our multi-channel strategy".
"Our customers increasingly expect products from us through a variety of distribution channels, delivered to them or collected by them via a time, place and mechanism that suits their needs".
"The experienced Toolstation team have already developed one successful business in this market and we are delighted to be working with them with the aim of creating the market leader using their skills and our scale and resources".
Mark Goddard-Watts, founder and Chief Executive of Toolstation said; "We had planned to find a strategic partner at this stage of our development to support and continue our growth and we believe that Travis Perkins' culture and ambition perfectly suits our plans".
"With Travis Perkins' support, we look forward to continuing to deliver great value products to an increasing number of customers across the UK".
Andrew Hodgson, partner at KPMG and advisor to Toolstation said; "Toolstation's management has created a scalable platform for growth which is outstanding".
"It was clear from the first contact between Travis Perkins and Toolstation that this deal and its structure makes perfect sense for both sides.".
• Travis Perkins: contact details and other news
• Email this article to a colleague
• Register for the free Buildingtalk email newsletter
• Buildingtalk Home Page
Search the Pro-Talk network of sites
