Plumbing solutions company Reliance Worldwide Corporation has announced that it has entered into an agreement to purchase Holman Industries for $160 million ($US 105 million), a seven times multiple on Holman’s EBITDA for the last 12 months.
Holman is a Perth-headquartered, family-owned manufacturer and distributor of branded plumbing and watering products, sold through retail and wholesale channels in Australia.
In an ASX statement on Tuesday, Reliance said it expected the acquisition would double its annual net external sales in the Asia Pacific region to approximately $360 million.
The acquisition is to be funded by debt “utilising RWC’s existing committed borrowing facilities” and scheduled to be completed in March, subject to conditions.
Holman founder Wally Edwards will stay on for two years after the acquisition is completed.
RWC CEO Heath Sharp said Holman would bolster the company’s position in Australia and was in line with its growth strategy.
“The acquisition of Holman provides RWC with immediate and substantial access to the Australian water-out segment, allowing us to strengthen our overall offering and be an even better partner to our core plumbing wholesalers in Australia,” said Sharp.
“Holman also gives RWC significantly expanded access to the retail channel in Australia. This will provide us with the opportunity to grow our legacy RWC products within retail while also putting more scale and manufacturing capability behind Holman.”
About half of Holman’s revenues are via sales of “water-out” plumbing products, focused on drain, waste and vent (DWV) solutions, stormwater fittings, and PVC pressure fittings.
Remaining revenues are via sales of watering products such as hose systems, fittings, timers, and garden products in retail and hardware.
It manufactures PVC plumbing products for DWV solutions at factories in Western Australia and Queensland, with its other products imported.
Picture: Holman Industries’ Perth headquarters (credit Holman)