Norcros Completes Acquisition of South Africa's 'House of Plumbing'

Norcros, a market leading supplier of high quality and innovative bathroom and kitchen products is pleased to confirm that, further to its announcements on 16 January and 25 March 2019, it has today completed the acquisition of South African based RAP Plumbing Supplies (Proprietary) Limited, trading as House of Plumbing. 

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. The business operates from three branches in South Africa located in Johannesburg (which is also where the head office is based), Pretoria and Lephalale.

The business employs 102 people and has an experienced management team led by Managing Director Robin Roberson, all of whom will be staying with the business.

The plan to acquire the business was announced in January 2019, when the company revealed that its South African business, Norcros South Africa (Proprietary) Limited, had entered into a conditional agreement to acquire 100% of the share capital of South African based RAP Plumbing Supplies (Proprietary) Limited.

The company is owned by the directors, a number of other employees and private investors and is being sold for a total consideration of up to South African Rand 215m (approximately £12.1m) on a debt and cash free and normalised working capital basis. 

Of the total consideration, ZAR 172m (approximately £9.7m) will be settled in cash on completion and up to a further ZAR 43m (approximately £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.

For the year ended 30 April 2018, House of Plumbing's audited financial statements showed revenue of ZAR 392m (approximately £22.1m), EBITDA of ZAR 33m (approximately £1.9m) and profit before tax of ZAR 34m (approximately £1.9m).  As at 30 April 2018 the business had gross assets of ZAR 112m (approximately £6.3m). House of Plumbing has continued to trade in line with its management's expectations for the 8 months ended 31 December 2018. 

Norcros recently saw two directorate changes - the appointment of Alison Littley to the Board as Non-Executive Director and Chair designate of the Remuneration Committee and the stepping down of Jo Hallas as Non-Executive Director and Chair of the Remuneration Committee.

Source : Insight DIY Team and Norcros

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