Travis Perkins to buy BSS for £558m

Housebuilder Travis Perkins (LON:TPK) announced it is making a recommended cash and shares offer to acquire BSS Group (LON:BTSM) for £557.6 million, projecting the deal to result in £25 million annualised cost savings in 2013 and deliver “materially enhanced earnings” in 2011, the first full year after completion of the Acquisition
The consideration amounts to 435.9 pence for each share in BSS, consisting of 232.91 pence in cash and 0.2608 new shares in Travis Perkins valued at 196.8 pence and payment of the BSS final dividend for the year ended 31 March 2010 of 6.09 pence.

Travis Perkins said that the combination would set up a “leading plumbing and heating trade and retail distribution business” in the UK in addition to its strong position in UK heavy side distribution. The group is expected have the operational and financial size to be able to purchase products “more competitively” and service customers more efficiently through Travis Perkins’ supply chain, also cutting BSS’ reliance on external vendors and providing the enlarged group will access to “attractive trading locations!".

The transaction is expected to become effective middle through Q4 2010.
“We believe that there is a strong strategic rationale for the acquisition of BSS which will create the leading plumbing and heating trade and retail distribution business in the UK. Our respective businesses are complementary and we look forward to working with BSS's customers, suppliers and employees. We are confident that this transaction can deliver significant value for the shareholders in the enlarged group,” said Travis Perkins chairman Robert Walker.