Travis Perkins to buy BSS for £553m

Grant Prior 14 years ago
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Builders’ merchant Travis Perkins has launched a £553m takeover bid for heating and plumbing specialist BSS.

Both firms confirmed they were in “advanced discussions” in an announcement to the Stock Exchange this morning.

The cash and shares offer is expected to be accepted by BSS shareholders creating the biggest plumbing and heating trade and retail distribution business in the UK.

BSS currently operates from nearly 400 branches nationwide at its specialist divisions serving the domestic and commercial markets.

Shares in BSS soared more than 30% during morning trading following the announcement.

A Travis Perkins statement said: “The board  has, for some time, believed that further consolidation in the UK building materials merchanting sector offers significant scale benefits in terms of cost savings and improved operational efficiency to those that proactively participate.

“In addition, Travis Perkins believes that the recession has accelerated the long-term trend of customers’ increasing use of different distribution channels to source building materials.

“Against this backdrop, Travis Perkins believes there is a powerful strategic logic which underpins a combination of Travis Perkins’ plumbing and heating activities through its existing distribution and retailing businesses with BSS.”

Travis hopes the deal will give the enlarged group the financial clout to purchase products more competitively and cuts costs by merging locations and combining centralised services.

The statement said: “Having successfully integrated a number of merchanting and retailing businesses into the Travis Perkins group, Travis Perkins believes that similar success can be achieved through a combination with BSS and that it should be well placed to realise synergies arising from purchasing efficiencies and the removal of central costs.”

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