Metcash (ASX:MTS) today announced that it has completed the acquisition of a 70 per cent interest in Total Tools Holdings.
The terms of the agreement, including the purchase price of $57 million for the 70 per cent.
The purchase price was determined based on a normalised annual EBITDA of $12.6 million.
Total Tools has however benefited from a change in consumer behaviour related to Covid-19 and is expected to report a significantly higher EBITDA for the year ended 30 June 2020.
Metcash will acquire the Total Tools franchisor operations, as well as two company-owned stores, including the recently opened store in Rockhampton, Queensland.
The acquisition structure includes a clear pathway for Metcash to acquire the remaining 30 per cent stake in Total Tools by early 2024.
Shares in Metcash (ASX:MTS) are trading 1.03 per cent lower at $2.89.