Wholesale and distribution giant Metcash has acquired a larger stake in hardware franchise chain Total Tools, upping its ownership from 70 per cent to 85 per cent with a $59.4 m spend.
The announcement of the extra investment comes less than a year after Metcash bought the majority share of Total Tools, which is the franchisor of 90 hardware stores across the country.
The Metcash debt facility to Total Tools has also increased to $65m from $40m, enabling the business to further expand the retail network.
In December 2020 Metcash took between 51 per cent and 60 per cent ownership of 12 retail stores in the chain with options to acquire 100 per cent between 2024 and 2025.
Continued strong performance by the franchise chain between the acquisition in September 2020 and 30 April 2021 added a substantial 24 per cent to Metcash EBITDA.
Full year results showed the business performed well in FY202/21. Group CEO Jeff Adams said “It has been a standout year for Metcash, with record sales underpinning significant earnings growth and record operating cashflow.
The hardware division, which includes the Home Timber and Hardware Group, benefited from the impact of lockdown, with increased interest in handyman projects helping to deliver EBIT growth of 62 per cent.
“Metcash continues to be well-placed to invest in its growth plans and remains focused on champioining the success of its independent retailers through further improving their competitiveness,” Adams said.
