Insider Media Limited

Travis Perkins, the Northampton builders’ merchant, has bought Leicester’s BSS Group for £557.6m.

The cash and shares deal, which follows an initial £553m bid made in May 2010, values each BSS share at 435.8 pence, with a mix and match loan note alternative also available.

According to the companies, the acquisition will deliver £25m of savings in 2013, and will improve earnings by 2011. In addition, the pair said cross selling opportunities will provide growth potential.

Robert Walker, chairman of Travis Perkins, said: "We believe that there is a strong strategic rationale for the acquisition of BSS, which will create the leading plumbing and heating trade and retail distribution business in the UK.

“Our respective businesses are complementary and we look forward to working with BSS's customers, suppliers and employees. We are confident that this transaction can deliver significant value for the shareholders in the enlarged group."

In May, BSS reported a profits fall from £57.8m in 2009 to £44.2m for the period ending 31 March 2010. Revenues increased slightly, from £1.34bn last year to £1.35bn this year. On 17 May, Travis Perkins reported a 2.2 per cent growth in revenue for the four months to 30 April 2010, with like-for-like sales up 1.4 per cent.

Who advised?

HSBC and Nomura are acting as joint financial advisers to Travis Perkins. Citi and Credit Suisse are acting as joint corporate brokers to Travis Perkins.

Lazard is acting as lead financial adviser to BSS. RBS Hoare Govett is acting as corporate broker and financial adviser to BSS.