Lords Group Trading (LSE:LORD.L) has completed the purchase of the remaining 6.4% minority stake in its DH&P subsidiaries for £1.1 million in cash, taking its ownership to 100%.
The AIM-listed distributor of building materials, plumbing, heating and DIY products originally acquired a 90% interest in Direct Heating and Plumbing (DH&P) in April 2022, with a put and call option over the vendors' retained 10% stake at a predefined market value.
Lords bought 3.6% of that remaining stake from one of the vendors earlier in the year, and has now exercised the option over the final tranche, funding the £1.1 million consideration from existing resources.
DH&P sits within Lords' Plumbing & Heating division, the segment that has been the weakest part of the group this year: first-half revenue there fell to £96.3 million from £112.9 million, a 13.9% like-for-like decline, and the division has since been consolidated from seven distribution centres to four.
The buyout tidies up the ownership structure at a time when the Group is focused on cash generation and covenant management, having amended its banking facility covenants on 6 November to set a leverage target of 3.0 times bank-calculated adjusted EBITDA by 31 March 2028 and barred dividends while leverage exceeds 3.5 times.
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