26/11/2020 - 13:00

Stealth Global shares soar on Qld buy

26/11/2020 - 13:00

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Shares in Perth-based Stealth Global Holdings surged 80 per cent today after it announced the purchase of a hardware and tool supplier for $3.8 million.

C&L Tool Centre has a megastore, showroom and distribution centre.

Shares in Perth-based Stealth Global Holdings surged 80 per cent today after it announced the purchase of a hardware and tool supplier for $3.8 million.

Stealth is buying C&L Tool Centre, which specialises in industrial workplace and hardware supplies.

Based in Brisbane, C&L has operated in Australia for more than 60 years, currently with three divisions and 27 employees. It has a megastore, showroom and distribution centre.

C&L delivered revenue of $14.3 million in the past financial year, and underlying earnings of $1.26 million.

Stealth managing director Michael Arnold said C&L was a highly regarded business.

"The depth of C&L’s wide-ranging products and tailored services will give the merged businesses greater scale as we continue to build a national distribution network," Mr Arnold said.

“We have strict criteria on price and on delivering long term value to our shareholders and customers, and we believe C&L meets these requirements."

Mr Arnold said the acquisition was in line with Stealth's growth plan since listing on the ASX in late 2018. The company is seeking to expand its product offering, distribution capability and network.

Stealth will pay $2.45 million in cash to acquire C&L, along with $480,000 in company shares priced at 10 cents each and $900,000 in deferred payments over the next 12 months.

Settlement is expected to occur on December 1.

C&L’s directors and management will continue to operate the business under the change in ownership, Stealth said.

Its share price hit a high of 15 cents before easing to 12 cents at 2:17pm AEDT, up 38 per cent on yesterday’s close.

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