Home fixtures supplier GWA International Ltd
(ASX:GWT) has struck a conditional $50 million deal to acquire the business and assets of air conditioning company, Brivis Climate Systems.
GWA managing director Peter Crowley says the Brivis business is a logical extension to GWA’s Dux water heating business, and he plans to integrate the two to form a new division called GWA Heating and Cooling.
The new division will leverage off builder relationships and technology development common to both the Dux and Brivis businesses to improve GWA’s offer to the heating and cooling market.
The company says the acquisition cost will be funded from existing bank facilities and represents about six times sustainable earnings before interest, tax, depreciation and amortisation.
The establishment of GWA Heating and Cooling will create a substantial business with revenue expected to exceed $200 million annually.
Mr Crowley says the new division will meet the company’s investment criteria of achieving a return on funds employed of 17% within three years.
GWA International posted a profit of $48.32 million for the 2009 financial year.
