IGA supplier Metcash says it has agreed to buy a 70 per cent stake in Total Tool Holdings for $57 million, with an option to acquire the rest of the company within the next four years.
Total Tool is a franchisor for the 81 bannered Total Tools stores nationwide, a store network aimed at selling to professional tradespeople.
Metcash will also buy one company-owned Total Tools store, and provide the acquired company with a $35 million debt facility.
Metcash chief executive Jeff Adams said the acquisition would benefit both independent hardware retailers in both Total Tool and the hardware stores that Metcash supplies – Mitre 10, Home Timber & Hardware and Hardings Hardware.
The acquisition is subject to approval by the Australian Competition and Consumer Commission, and will be funded through part of the $330 million equity raising Metcash undertook in April.
At 1201 AEST, Metcash shares were flat at $2.75.