RWC acquires Holman Industries for A$160 million

SYDNEY, AUSTRALIA: Reliance Worldwide Corporation Limited (RWC), a global leader in plumbing solutions, has announced the acquisition of Holman Industries, a leading manufacturer and distributor of plumbing and watering products in Australia, for A$160 million (US$105 million).

According to the business announcement, the deal, which reflects a 7.0 times multiple of Holman’s last twelve months EBITDA before synergies, is expected to be earnings per share accretive from the first full year of ownership and to enhance RWC’s return on capital employed.

Holman, founded by Walter (Wally) Edwards, who will remain with the business for two years, offers a range of “water-out” plumbing products focused on drain, waste and vent solutions, stormwater fittings, and PVC pressure fittings, as well as watering products such as hose systems, fittings, timers, and garden products. Holman sells its products through retail and wholesale channels in Australia, with a strong retail fulfilment execution expertise.

Holman recorded net sales of A$192 million and adjusted EBITDA of A$22.9 million in the 12 months ended 31 December 2023. The acquisition of Holman is expected to double RWC’s annual net external sales in its Asia Pacific region to approximately A$360 million and increase its net sales for the current financial year ending 30 June 2024 by approximately A$50 million.

RWC Chief Executive Officer, Heath Sharp, said the acquisition of Holman aligns with RWC’s growth strategy and will enhance its market position in Australia.

“Product innovation coupled with high levels of customer service have been instrumental in driving Holman’s growth. This is strongly aligned with RWC’s approach to growing its business,” he said.

“The acquisition of Holman provides RWC with immediate and substantial access to the Australian water-out segment, allowing us to strengthen our overall offering and be an even better partner to our core plumbing wholesalers in Australia. Entering the water-out market is a strategic priority in each of our three regions. While we have looked at other opportunities globally, Holman marks our first foray into this end market. We expect it will help lead and catalyse our approach in other markets globally.”

“Holman also gives RWC significantly expanded access to the retail channel in Australia. This will provide us with the opportunity to grow our existing product portfolio and introduce new products to a broader customer base,” he added.

RWC expects to achieve cost savings of approximately A$5 million per annum on a run rate basis by the end of Year 3 through distribution footprint rationalisation and optimisation. The acquisition will be debt funded utilising RWC’s existing committed borrowing facilities, resulting in a pro-forma leverage of 1.90 times net debt to pro forma EBITDA post completion, compared with 1.69 times at 30 June 2023.