Wally Edwards, the founder and managing director of Perth-based plumbing and home irrigation producer Holman Industries, has agreed to a $160 million buyout by Reliance Worldwide Corporation (ASX: RWC) and the end of 58 years at the helm of the company.
However, Edwards, a former Test cricketer who established Holman in 1966, is likely to round out 60 years after agreeing to stay on with the business for the next two years.
RWC says the $160 million purchase price represents seven times Holman’s EBITDA before synergies, with the acquisition expected to be earnings accretive in the first full year of ownership.
Holman, which operates seven distribution centres nationally, recorded net sales of $192 million and adjusted EBITDA of $22.9 million calendar 2023.
RWC says the acquisition will double the annual net external sales from its Asia Pacific division to about $360 million. Holman will contribute about $50 million in sales during the current financial year after the deal is completed as planned in March.
Holman is an independent manufacturer and distributor of branded plumbing and watering products that are sold through retail and wholesale channels in Australia.
When Edwards founded the company in 1966, he largely focused on innovative electronic water devices and over the past two decades widened his focus to include more efficient domestic watering products, as well as lighting, garden décor and plumbing fittings.
About half of the company’s revenue is generated from ‘water-out’ plumbing products comprising ‘drain, waste and vent solutions’, stormwater fittings and PVC pressure fittings.
The company, which manufactures its drain and waste products at plants in Western Australia and Queensland, is better known as a wholesaler of watering products such as hose systems, fittings, timers and garden products.
The Melbourne-based RWC, which itself had humble beginnings as a small Brisbane tool shop in 1949, is a global enterprise that manufactures and supplies water flow and control products. It is also the world's largest manufacturer of ‘push to connect’ plumbing fittings.
“Product innovation coupled with high levels of customer service have been instrumental in driving Holman’s growth, says Heath Sharp, the CEO of RWC.
“This is strongly aligned with RWC’s approach to growing its business.
“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.”
Sharp describes the water-out market is a ‘strategic priority in each of our three regions’.
“While we have looked at other opportunities globally, Holman marks our first foray into this end market. We expect it will help lead and catalyse our approach in other markets globally.
“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.
“This acquisition will allow us to utilise Holman’s retail operational capabilities in other parts of the world, while also enabling us to look for opportunities to bring our US retail market expertise to Australia.”
The acquisition is being debt funded which is expected to lift RWC’s leverage to 1.9 times pro-forma EBITDA following settlement, up from 1.69 times at 30 June 2023.
Sharp is pleased that Edwards will remain with the business in an advisory capacity over the next two yeas.
“Wally has built a really strong team, and we see a significant amount of very capable talent within Holman that will augment RWC’s global capabilities,” he says.
Edwards, who played three Test matches and a One Day International for Australia in the 1970s, was chairman of Cricket Australia from 2011 to 2015 and has been a strong supporter of the sport throughout his business career.
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