Builders' merchant Travis Perkins has agreed to purchase plumbing and heating company BSS Group for £557.6 million.
The cash and shares deal values BSS shares at 435.8 pence, a 4.7% premium on Friday's closing price of 416.2p. It is the largest acquisition by Travis Perkins since the £950 million takeover of the Wickes DIY chain in 2005.
Northampton-based Travis believes it can achieve pre-tax savings of at least £25 million by 2013 through the deal, with £19 million in purchasing benefits and £6 million from overheads. "Our respective businesses are complementary and we look forward to working with BSS's customers, suppliers and employees," said chairman Robert Walker.
The board of Leicester-based BSS is supporting the proposal. Peter Warry, chairman of BSS, said: "The management team and employees have succeeded in building BSS into a leading specialist distributor to trade customers and a market leader in the UK plumbing and heating sector, creating significant value for shareholders.
"The BSS board believes that Travis Perkins' offer recognises this value and gives our shareholders the opportunity to share in the future success of the enlarged group."
The deal is subject to shareholder approval, but Travis claims to have already received undertakings of support from around 35 per cent of BSS investors.
