REG - Grafton Group PLC - Agreement to Acquire Mercaluz in Spain

GraftonAnnouncement

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RNS Number : 2212X  Grafton Group PLC  19 March 2026

Grafton Group plc

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Agreement to acquire Mercaluz

Significant further investment into growing Iberian HVAC market

Grafton Group plc ("Grafton"), the leading European multinational distributor
of construction related products and solutions, is pleased to announce that it
has entered into an agreement, subject to approval from the Spanish National
Commission for Markets and Competition, to acquire the entire issued share
capital of Componentes Eléctricos Mercaluz, S.A., Mercaluz Hogar, S.L.U., EAS
Electric Smart Technology, S.L.U. and Mercaluz Canarias, S.L.U.  (together
"Mercaluz").

Mercaluz is a family-owned Spanish group founded in 1986 and headquartered in
the province of Alicante on the Iberian Peninsula. It is predominantly a
distributor of domestic and commercial air conditioning equipment to
professional SME installers, with c.10,500 customers in 2025.  Almost three
quarters of sales in 2025 were from own brands, primarily the fast-growing
Johnson brand, over which Mercaluz owns the European rights. Approximately 70
per cent of sales are aimed at the professional installer market, either
direct or through resellers, with the remainder of sales from appliances and
white goods which are almost exclusively sold to wholesalers, resellers and
developers.

Mercaluz achieved strong growth in 2025 reporting unaudited revenue of
€150.4m and unaudited adjusted operating profit(1) of €22.2m.  The total
consideration is a maximum of €175m but anticipated to be approximately
€165m on a cash and debt free basis(1) which will be determined following
completion of the statutory audited results (currently in progress).

The existing management team will remain in place, supported by a team of over
330 employees across 18 locations in Spain.

With growth of 2.6 per cent in 2025, Spain was amongst the best performing
economies in Europe last year.  The construction sector is expected to grow
by 3 - 4 percent in 2026 with the Heating, Ventilation and Air Conditioning
("HVAC") sector amongst the fastest growing categories.  The acquisition of
Mercaluz represents an important step forward in Grafton's strategy to
consolidate and grow its presence in the fragmented Iberian distribution
market for construction related products and solutions following the
acquisition of Salvador Escoda in October 2024.  Both businesses operate in
the fast-growing HVAC segment and will benefit from purchasing synergies.
Each business will continue to operate independently to maximise the growth
potential inherent in their different but complementary business models.
Mercaluz operates on a direct-to-site delivery model with no branch network,
instead using regional delivery hubs to efficiently serve its customer base
with a focused product range (c.9,000 SKUs).  In contrast, Salvador Escoda
operates a branch-based model with 95 branches supplemented by direct
deliveries to sites and a capacity to draw on over 140,000 SKUs across its
product range.

The acquisition of Mercaluz is expected to be earnings enhancing in its first
full financial year following acquisition and to deliver an attractive return
on invested capital over the medium term. Grafton intends to support Mercaluz
in its brand development and ongoing organic expansion in the fragmented
Iberian marketplace.

Eric Born, CEO of Grafton Group plc said today:

"We are very pleased at the prospect of welcoming this scalable family
business and its quality management team into Grafton's growing presence in
Iberia. Mercaluz has all the characteristics we are seeking in an acquisition;
from the growth segment and markets it serves to its scalability and
reputation in the trade. Subject to regulatory approval, it will further
cement our position in the fast-growing Iberian HVAC market with combined
annualised sales of some €400m and is a further step in our ambition to
build a significant business distributing construction related products and
solutions in Iberia".

(1) On a post-IFRS 16 (leases) basis, the estimated unaudited adjusted
operating profit for the year ending 31 December 2025 is €22.4m and the
estimated value of leases at the end of December 2025 is €18.6m.

The person responsible for arranging release of this Announcement on behalf of
Grafton is Susan Lannigan, General Counsel and Company Secretary of Grafton.

Ends

For further information please contact:

 Investors                                   Media

 Grafton Group plc  +353 1 216 0600          Murray

                                             pwalsh@murraygroup.ie (mailto:pwalsh@murraygroup.ie)
 Eric Born          Chief Executive Officer  Pat Walsh                               +353 1 498 0300

                                                                                     +353 87 226 9345
 David Arnold       Chief Financial Officer
                                             Burson Buchanan

                                             GraftonGroup@buchanancomms.co.uk (mailto:GraftonGroup@buchanancomms.co.uk)
                                             Helen Tarbet                            +44 (0) 7872 604 453
                                             Simon Compton                           +44 (0) 7979 497 324
                                             Toto Berger                             +44 (0) 7880 680 403

 

About Grafton

Grafton Group plc is a European multinational distributor of construction
related products and solutions comprising four geographic segments serving the
Island of Ireland, Great Britain, Northern Europe and Iberia.  In our home
Irish market, we also operate the leading home improvement retailer.

Trading from c. 470 branches with c. 10,000 colleagues, the Group's portfolio
of market leading, trusted brands includes:

 ·         Island of Ireland: Chadwicks Group, Woodie's and MacBlair
 ·         Great Britain: Selco, Leyland SDM, T.G. Lynes, CPI EuroMix and StairBox
 ·         Northern Europe: Isero / Polvo (Netherlands) and IKH (Finland)
 ·         Iberia: Salvador Escoda (Spain)

 

For further information visit www.graftonplc.com (http://www.graftonplc.com/)

 

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