Lords Group Trading PLC on Friday announced its acquisition of Alloway Holdings Ltd for £2.3 million, and said it expects the timber merchant to become earnings accretive next year.

The London-based building materials distributor said that Alloway Holdings, a London-headquartered timber and building supplies provider trading as Alloway Timber & Builders Merchants, delivered £15.9 million in revenue in 2022.

Of the £2.3 million net total consideration, Lords said £1.5 million is payable immediately. Payment of the remaining £720,000 will be deferred until 12 months after entry into the sale and purchase agreement.

Lords also said it will pay down £1.1 million of Alloway Timber’s existing debt as soon as the acquisition is complete.

Lords said buying Alloway Timber is in line with its stated initial public offering strategy, since its geographic position complements Lords’s Merchanting branch portfolio. Alloway operates from five sites across the south east of England, and joining Lords will expand its reach to 17 locations in the area.

‘We are delighted to announce the successful acquisition of Alloway Timber and to welcome their 83 colleagues to the Lords Group family,’ said Chief Executive Officer Shanker Patel.

‘The acquisition is complementary to our existing Lords Builders Merchants business with strong synergies, continued strategic investment...and will increase our customer base - along with further increasing our geographic presence in the South East.’

Lords expects the acquisition to be earnings accretive starting from 2024 onwards, and to achieve a strong return on capital employed ‘as synergies are realised and the business financially and operationally matures in-line with a typical Lords Builders Merchant profile.’

Lords Group Trading shares were up 5.4% at 68.00 pence in London on Friday.

Copyright 2023 Alliance News Ltd. All Rights Reserved.