12/01/2022 - 15:14

Stealth acquires United Tools

12/01/2022 - 15:14

Bookmark

Upgrade your subscription to use this feature.

Stealth Global has doubled the size of its national retail store network by acquiring United Tools, which has been trading at close to break-even.

Stealth acquires United Tools
United Tools achieved revenue of $8 million in the last financial year.

Stealth Global has doubled the size of its national retail store network by acquiring United Tools, which has been trading at close to break-even.

Stealth will pay just $24,000 for United Tools, which has operated as a buying and distribution cooperative for independent equipment retailers.

In addition, United Tools (under Stealth’s ownership) will pay its members (excluding Stealth subsidiary C&L Tool Centre) a marketing subsidy of $1.25 million.

Half will be payable in March 2023 with the balance due in March 2024.

The assets to be transferred to Stealth on completion include $1.22 million of net cash.

United Tools had revenue of $8.0 million in FY21 and underlying earnings (EBITDA) of just $300,000.

Stealth said it was targeting an underlying EBITDA margin of 6 per cent, before significant item costs relating to acquisitions and the full integration of United Tools and Skippers Transport Parts.

Longer term, it is targeting an 8 per cent EBITDA margin in FY25.

United Tools has a national network of 33 stores – the same number Stealth currently has.

This includes four in WA, where Stealth has 10 stores.

Managing director Mike Arnold said the acquisition would significantly enhance Stealth’s scale, market position and buying power.

“Preferred suppliers will significantly benefit as we plan to consolidate arrangements held by UTL and all Stealth subsidiaries into a new master buying & wholesale distribution business unit,” he said.

“This initiative will drive deeper commercial engagement, brand reach and create more value by leveraging group wide buying power potential identified to be more than $200 million.”

In a trading update, Stealth said it had achieved growth in sales to $46.5 million for the half year to December 2021.

It expects annual revenue from its Australian operations to reach more than $100 million when a full year of United Tools operations is incorporated into Stealth’s financial results.

Stealth’s share price closed up two cents today at 16.5 cents, close to its highs for the year.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options