Tradelink acquisition imminent as PE firms prepare bids

by | Jun 20, 2024

Competitive bids to acquire Fletcher Building’s plumbing and bathroom supplies business, Tradelink, are currently underway.

Sydney’s Anchorage Capital Partners has hired Grant Samuel and EY to prepare its bid for Tradelink, while Allegro Funds has enlisted Alvarez & Marsal to also bid for the bathroom, kitchen and laundry retailer, a Channel News report has found.

In February this year Fletcher Building – which trades on both the Australian and New Zealand stock exchanges – revealed plans to sell Tradelink after acquiring the retail group in 2012.

Earlier this year Fletcher also released its financial results for the six months to December 31, 2023, indicating that its total revenue fell one per cent compared to the same time last year, coming in at NZ$4.24 billion (A$3.98 billion). It also posted a net loss after tax of NZ$120 million (A$113 million), down from a net profit after tax of NZ$92 million (A$86 million) in the second half of 2022.

Tradelink was reportedly unable to compete head-to-head with the popular  Reece Group in Australia. Consequently Fletcher was forced to write down the value of the plumbing supplier by NZ$122 million (A$115 million) and put the business on the auction block.

Rumours of Fletcher Chief Executive Officer Ross Taylor, and Chairman Bruce Hassall departing the business later this year have also been confirmed.

As Anchorage and Allegro prepare their bids, media reports indicate that both bidders are already scouting for talent to fill the top management roles should they be successful in their bids.

Tradelink is Australia’s oldest plumbing supply retailer, having opened more than 150 years ago and now has more than 100 showrooms and 230 branches across the country.